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UPDATE 1-Nigeria's Buhari calls electricity price rise, petrol deregulation crucial decisions

Published 07/09/2020, 16:03
Updated 07/09/2020, 16:06

(Adds details, quotes, background)
ABUJA, Sept 7 (Reuters) - Nigeria's increase in electricity
prices and the deregulation of petroleum sector were crucial
decisions taken at the start of year, a statement by President
Muhammadu Buhari said on Monday.
Multilateral lenders have for years urged Nigeria to remove
costly fuel subsidies, change electricity tariffs which have
held prices artificially low and end the country's multiple
exchange rate system. Last month sources said a much-needed $1.5
billion World Bank loan was held up due to concerns over such
reforms.
The government in March announced a new pricing mechanism
that it said would maintain its control, but allow prices to
move with the market and eliminate subsidies. Last week pump
prices rose to a record level, days after electricity prices
rose.
A statement issued by the presidency said the increase in
electricity prices and deregulation of the petroleum sector were
"crucial decisions that were taken at the beginning of the
year".
"There is no provision for fuel subsidy in the revised 2020
budget, simply because we are not able to afford it, if
reasonable provisions must be made for health, education and
other social services. We now simply have no choice," Buhari was
quoted as saying in the statement.
Cheap fuel prices are seen by many in Nigeria as a benefit
of living in an oil-rich country. An attempt by erstwhile
President Goodluck Jonathan to eliminate subsidies was scuppered
after riots ensued.
Africa's largest oil producer had been spending 1 trillion
naira ($2.63 billion) a year subsidising petrol prices but the
global oil price crash made removing subsidies "inevitable", the
oil minister said last week, adding that the country was no
longer fixing fuel prices.

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