Abuja — The Minister of State for Petroleum Resources, Mr. Timipre Sylva yesterday declared that the subsidy element was still being retained in the pricing of petroleum products, explaining that though there is currently no direct price control, there is still some form of subsidy at the foreign exchange component of the pricing regime.
Sylva has also argued that Nigerians should be proud that the federal government is set to resume the importation of petroleum products from neighbouring Niger Republic
Sylva, who spoke when he appeared on live TV programme last night, stated that if the government completely hands off the pricing regime, Nigerians would be buying at a much higher price.
"Government is no longer in the business of fixing petroleum prices. That's what was agreed and that's what is being done. The timing is not a good time, but it is also not a good time for the country. It's not just a Nigerian problem. It's a global problem.
"We are still trying to manage this bumpy start. We have not been able to get to the 100 per cent removal of subsidy from the foreign exchange end.
"If we were to actually take it out completely and allow people to access foreign exchange from the parallel market and import the product, the price at the pump will even be more.
"But the federal government knowing the impact this will have on the people decided that they are going to still manage the situation. NNPC is the only one that is able to import and it's because they generate their own dollars and they are able to import directly from their dollars, " he stated.
"For now, NNPC as the supplier of last resort continues to play that role to supply the products at a slightly subsidised rate. So, it's still subsidised in a way.
"We cannot say they (NNPC) are accessing dollars at a subsidised rate from the CBN, but they generate dollars from crude oil swap, and use the crude oil swap. Somehow, we know that there's still a subsidy element and we are not in a hurry to take that off now because if we take that off, it's going to impact the people much more than now," he noted.
Sylva said contrary to comments by critics of the government, the plan by the federal government to resume fuel importation from its West African brother should not be seen as 'an embarrassment' but rather as a means of encouraging intra-regional trade.
"I don't see that as an embarrassment at all. As a country, Nigeria is a big market. Even if we repair all our refineries, we will still need extra product. Niger Republic produces oil and they are landlocked as country. They have a refinery that refines in excess of what they require and they sell the excess to us in Nigeria because this is a bigger market.
"In in the spirit of regional cooperation, we decided that we will buy from them. I do not see anything wrong with that. If you see anything that your country needs and you buy from them, I don't see anything wrong with that. How is that a big problem?
"I think Nigeria should even be proud that we are doing that to be able to do some regional trade. This is one of the examples of how it should be done. Let us try and encourage intra-regional trade and this is one good example within West Africa," he noted.