The Federal Government on Tuesday hinted at a likely hike in the pump price of petrol.
Minister of State for Petroleum Resources Timipre Sylva urged Nigerians to be ready to bear the pains of increased petrol price as crude oil price climbs above $60 per barrel.
The price of a litre of petrol is between N160 and N165, the price set when crude traded just above $43 per barrel four months ago.
Sylva spoke at the launch of the Nigerian Upstream Cost Optimisation Programme (NUCOP) in Abuja.
Also speaking at the event, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) – an affiliate of the Trade Union Congress, stated this amid concerns that the government may increase the price of premium motor spirit (otherwise known as petrol) following an increase in the global price of crude oil to $60 per barrel.
PENGASSAN President Festus Osifo said there must be cost reduction in the oil and gas sector.
Osifo said: “Speaking about cost reduction in the oil and gas industry; it is a good initiative. But, we should look at cost reduction in governance because today the cost of our governance is quite increasing and at a very alarming rate.
“As we are tasking employees in oil and gas industries to come up with initiatives that could reduce our costs, let us also look at the way we have been managing government; the way we have been increasing bureaucracies. This must be looked at because nobody should be a sacred cow.”
Sylva said the Nigerian National Petroleum Corporation (NNPC) cannot continue to bear the cost of under-recovery because there is no provision of subsidy in the 2021 budget.
The petroleum minister noted that while government revenue had improved by the rise in crude oil price globally, it cannot be fretted away in subsidy payments.
Sylva said: “Since we are optimising about everything, NNPC needs to also think about the optimisation of product cost because as we all know oil prices are where they are today, $60.
“As desirable as this is, this has serious consequences as well on product prices. So we want to take the pleasure and we should as a country be ready to take the pain.
“Today the NNPC is taking a big hit from this. We all know that there is no provision in the budget for subsidy.
“So, somewhere along the line, I believe that the NNPC cannot continue to take this blow. There is no way because there is no provision for it.
“As a country, let us take the benefits of the higher crude oil prices and I hope that we will also be ready to take a little pain on the other side; on the side of higher product prices.”
The minister’s position was shared by the Group Managing Director of the NNPC, Mr Mele Kyari.
The NNPC boss noted that although Nigeria, like other countries in the world, was happy about the increase in the price of crude, it comes with a consequence.