Governor Dapo Abiodun of Ogun state on Thursday defended Federal Government’s decision to hike petrol pump price and electricity tariff, saying that the right amounts must be paid to attract investments to the sectors.
He made the disclosure while speaking to State House Correspondents after meeting with President Muhammadu Buhari, to present a publication on his first one year in office in Abuja.
According to him, Nigerians should be able to pay the slight increase in petrol price since they will also enjoy lower prices when the prices of crude oil drop.
He stated: “First, you want to enjoy lower prices when the prices of crude are low and then not want to pay for a slight increase when there is an increase in price of crude.
“The price of crude is directly proportional to the price of refined products. So, I believe that is what is happening at the moment.”
On electricity tariff increase, he observed that there had not been an appropriate pricing, which had militated against the value chain of the power sector.
He said there is, therefore, the need to make the electricity value chain profitable to attract investment and have enough electricity for transmission.
According to him, “In terms of the tariff increase in the electricity industry, again, we also have to decide what we want to do.
“We all complain that we are not generating enough electricity and we all complain about the fact that we don’t have the right infrastructure to transmit electricity, we complain about the fact that the distribution companies do not seem to be efficient. The problem is because, perhaps, the pricing is not right.
“If you want people to invest in production of gas, in gas floatation, which our turbines and our power plants rely on, we must ensure that the entire value chain is profitable. Because if one part of it is not profitable, that means there will be a short fall in one of the value chains, if we don’t have enough investment.
“So, if you don’t have enough investment in gas gathering, if we don’t have enough investment in gas transportation, we will not have enough gas supply to sustain the quantum of generation we require as a government or as a nation. And when we don’t have that, we don’t have enough that will be transmitted to our homes and the transmission grid, and then, we continue to complain. So, really the truth is that it’s a cache 22 situation.“
Abiodun, while expressing the hope that the National Electricity Regulatory Commission (NERC) will implement the necessary regulation of the stakeholders, added: “But truly, we must begin to pay what we need to pay so that we can have the right amount of investment in the entire value chain of the electricity industry. “
The Pipeline and Product Marketing Company on Wednesday announced pump price of premium motor spirit (PMS) otherwise known as petrol increase to N151.56 per litre with effect from September 2, 2020.
Also, the Nigerian Electricity Regulatory Commission (NERC) in an official statement last week had said “Following consultations and directions on tariff policy, the Commission (NERC) hereby approves a deferment of the applicable tariffs for customers in service band D and E (that is customers with a service commitment of less than an average of 12 hours supply per day over a period of one month) for the period 1st September 2020 to 1st January 2021.”