JUST IN: Buhari gives reasons for hike in petrol, electricity tariff

President Muhammadu Buhari on Monday gives reasons why the pump price of petrol and electricity tariff were hiked.

Buhari said the increment in both petrol and electricity tariffs was due to the COVID-19 outbreak.

The president represented by the Vice President, Yemi Osinbajo stated this at the ministerial performance review retreat, on Monday, in Abuja.

Buhari said the pandemic led to a downturn of funds to finance the country’s budget.

The President, who listed negative consequences if the government should resume the business of fixing or subsidizing PMS prices, said it would mean a return to the costly subsidy regime with the potential return of fuel queues.

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According to him, “The COVID-19 pandemic has led to a severe downturn in the funds available to finance our budget and has severely hampered our capacity. One of the steps we took at the beginning of the crisis in March when oil prices collapsed at the height of the global lockdown was the deregulation of the price of Premium Motor Spirit such that the benefit of lower prices at that time was passed to consumers.

“This was welcomed by all and sundry. The effect of deregulation though is that PMS prices will change with changes in global oil prices. This means quite regrettably that as oil prices recover we would see some increases in PMS prices. This is what has happened now. When global prices rose, it meant that the price of petrol locally will also go up,” Buhari said.

On the issue of hike in electricity tariff, Buhari said that he was not happy with the quality of service being offered by the Distribution Companies of Nigeria (DISCOs).

Hence, Buhari said his administration was pursuing a mass metering program to provide meters for over 5 million Nigerians.

The president said protecting the poor and vulnerable while ensuring improved service in the power sector remained a major priority for his administration.

He said: “The other painful adjustment that we have had to make in recent days is a review of the electricity tariff regime. If there is one thing that we have heard over and over again, it is that Nigerians want consistent and reliable power supply. So, the power sector remains a critical priority for the administration.