Minister of State for Petroleum Resources, Mr. Timipre Sylva, said Nigerians would soon get used to hike in price of fuel.
According to the Minister, Nigerians will have to make a choice between fuel subsidy and the payment of their salaries.
Sylva spoke in an interview with State House correspondents after a meeting he had with President Muhammadu Buhari , at the Presidential Villa, Abuja.
The minister noted that the Federal Government’s earnings, from oil and non-oil sectors coupled with low revenue receipts from the Federal Inland Revenue Service (FIRS), have dropped by 60 percent, putting the nation’s economy under serious pressure.
He said, “Petrol is refined from crude oil, so petrol price is directly related to the price of crude oil in the market.
“So, if I buy crude oil at a certain price and refine this month, if the crude price is low at the time, then my petrol price will become low because the feedstock from which I refined petrol was lower in price.
“If the price of crude oil goes up, then it means the price of the feedstock has gone higher, it will also affect the price of the refined product and that is why you see that product prices are usually not static, it depends on the price of crude oil, which goes up and down.”
Sylva added, “If you have been following crude oil prices, you would have seen that crude oil prices went up a little bit, as a result of this (vaccine) announcement.
“So, when crude oil prices go up a little bit, then you will see that it instantly reflects on the price of petrol, which is a derivative of crude oil. That’s why you see that there’s this movement and if we listen to ourselves, this is the same explanation we’ve been giving.”
The minister said because of deregulation, the government was not longer in the business of fixing fuel price.
He further said, “Just take the example of our production levels; our crude oil production level was over two million barrels a day. Today, to comply with OPEC cut and quota, we have reduced production to 1.4 million barrels.
“Having reduced production to 1.4 million barrels, crude oil is also not selling at an optimal rate. Where do you get the money to continue to subsidise?
“It is very clear that today; things are not as they were before. The earnings of government has reduced by 60 percent and what is happening in the oil sector reflect what is happening elsewhere.
The minister also assured that Nigerians would get used to the recent deregulation of the pump price of PMS, just as they did with kerosene and diesel which are more important to ordinary citizens than petrol, which is mostly used by the elite.
“I believe that at this point, we are still trying to cross the first buck. We will get there; we will get used to it as Nigerians.”
According to him, trucks that move food items from one part of the country to another use diesel, while kerosene also used by most of the Nigerian masses, has since been deregulated.