President Muhammadu Buhari on Monday declared that the novel coronavirus pandemic which precipitated the lockdown of the economy has shrunk Nigeria’s revenue generation by about 60 per cent. He also said the era of subsidy for electricity and petrol is gone forever.
Speaking through the Vice President, Yemi Osinbajo during his second-term First Year Ministerial Performance Review Retreat in Abuja, the president said the government was not considering borrowing to fund subsidy for electricity and petrol, describing such thought as “grossly irresponsible”.
He said the government has not made any provision for fuel subsidy in the Revised 2020 budget and that about N1.7trn had been spent on tariff shortfall in the power sector since its privatisation under the last administrator.
He however assured that new electricity tariff model would be service-driven such that only customers who get electricity for 12 hours or more would pay the new tariff.
Buhari, who is currently in Niamey, Niger Republic to attend the 57th Ordinary Session of the ECOWAS Authority of Heads of State and Government said the Covid-19 scourge has led to a severe downturn in the funds available to government to finance the budget and deliver on its electoral promises.
“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 the lower prices at the time was passed on to consumers.
“The effect of the deregulation is that pump prices of petrol will change with the changes in global oil prices. This means quite regrettably that as oil prices go higher, we could see some increases in the pump price. This is what has happened now when global prices rose, it meant that the prices of petrol locally will also go up.
The First Year Ministerial Performance Review Retreat will focus on appraising the performance of the ministers and other officials in the President’s cabinet.