Sylva revealed this on Monday while appearing as a guest on Channels Television’s Politics.
“If we were to actually take it out completely and allow people to access foreign exchange from the parallel market and allow people to import the product, the price of the pump will even be more.
“The Federal Government, knowing the impact it will have on the people, decided that they are still going to manage this situation.”
Also, Sylva had disclosed recently that the government has also taken off the excess forex price that special rate that was given to NNPC which also came at a cost. “All the money that we used to defend the naira at that time to subsidise the dollar will now be freed up for development,” he said.
However, industry analysts said yesterday’s statement of the Minister may raise tension further among workers unions led by the Nigeria Labour Congress (NLC) who had staged a walk out on Sunday from the meeting with the Labour Minister Dr Chris Ngige on Electricity Tariff/Fuel increase.
“If a litre of petrol is now N170 and the minister is confident of his books, he should show Nigerians actual amount saved from deregulation and reasons for turning around that no complete deregulation,” Chief Abayomi Daniel President, Save Nigerian Workers lamented.
The minister, who said kerosene and diesel have been deregulated a long time ago, wondered why petrol cannot be deregulated.
When asked if the recent agreement the Federal Government signed with Niger Republic to import oil is an embarrassment, the minister simply replied in the negative.
“I don’t see that as an embarrassment at all. As a country, Nigeria is a big market. We need products. Even if all our refineries are functioning, we will still need extra products.
“Niger Republic produces oil and they are landlocked as a country. They have a refinery that refines in excess of what they require.
“They offered to sell the excess to Nigeria because this is a bigger market. In the spirit of regional cooperation, regional trade, we decided to buy from them. I don’t see anything wrong with that.”
In March, the federal government had announced that the Petroleum Products Pricing Regulatory Agency (PPPRA) would modulate pricing in accordance with prevailing market dynamics.
In line with the directive, the ex-depot price of petrol as determined by the Petroleum Products Marketing Company (PPMC) increased from N138.62 to N151.56 per litre last week.
He noted that previous administrations lacked the political will to remove subsidy.
“It’s time for Nigerians to face reality and do the right thing. What is deregulation going to do? It is going to free up a lot more money. At least from the very beginning it will save us up to a trillion and more every year,” Sylva said.
“Already, we have taken up the budgetary provision for subsidy which is about N500 billion in the budget. Also, we have taken off the excess forex price that special rate that was given to NNPC which also came at a cost. All the money that we used to defend the naira at that time to subsidise the dollar will now be freed up for development.
Sylva’s remarks took place three days after the current administration, through the Ministry of Petroleum Resources, signed a Memorandum of Understanding with the government of Niger Republic for petroleum products importation.
According to a statement released by the ministry, Soraz Refinery in Zinder, Niger Republic, has an installed refining capacity of 20,000 barrels per day compared to the nation’s 5,000bpd domestic requirement.