Timipre Sylva, the Minister of State for petroleum has declared that the recent increase in the price of petrol in Nigeria was occasioned by the increase in the price of crude oil on the international market.
This is as he also added that the announcement of the discovery of another COVID-19 vaccine said to be effective in the treatment of coronavirus triggered the increase in the global price of crude oil.
Sylva who spoke to State House correspondents on Monday after a meeting with President Muhammadu Buhari at the presidential villa in Abuja said petrol price would always go up whenever global crude oil prices also go up.
He, therefore, urged Nigerians to prepare for such changes as the nation has removed subsidy and adopted the deregulation policy which allows forces of market demands to determine petrol price product.
On the latest petrol price hike, the Minister submitted that Nigerians will soon adapt to the changes just as they did when kerosine and diesel were deregulated.
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 submitted that the government can no longer pay subsidy on petrol as its production level has reduced in compliance with OPEC directives while revenue accruing to the government has also reduced by about 60%, finally submitting that Nigerians will get used to the changes.
In his words, “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.
“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.”
Source: Naija News