As at last May, the country’s daily payment for fuel subsidy rose to N2.4 billion, from N774 million in March this year.
This was revealed in a report by the Petroleum Products Pricing Regulatory Agency (PPPRA). According to the report, without the subsidy, the price of petrol could increased to N205 per litre in the domestic market.
PPPRA revealed that the price of the commodity appreciated by 8.47 per cent from N189 per litre in April 25, to N205 per litre as at May 16.
But the price of petrol is fixed at a maximum of N145 per litre, which indicates that the Nigerian National Petroleum Corporation (NNPC) is currently paying N60 as under recovery for a litre of the commodity.
Based on the existing tariff regime, residential consumers (R2) are paying on the average 48 per cent more than what they were paying before as contained in the Multi Year Tariff Order 2.1 for 2015.
NERC Chairman/Chief Executive Officer, Dr. Sam Amadi, had said, “this is good for electricity consumers who have long asked for a more just and fair pricing of electricity. The regulatory commission had promised to address all the complaints against fixed charges through a regulatory process that promotes investments in the electricity industry without unfairly burdening electricity consumers.
The essence of the tariff order was to encourage the Discos to develop new sources of supply within their franchises to increase the quantity and quality of supply to target customers on a willing buyer and willing seller basis.
However, the USAID Country Mission Director, Stephen Haykin, who represented the US Ambassador to Nigeria, Stuart Symington, made the warning at the 10th Anniversary Colloquium of the Financial NigeriaMagazine in Abuja .
Haykin said the inability of the country to recover the cost of electricity as well as the failure to recover the full cost of production from pump prices of petroleum products meant that critical resources were being diverted instead of being invested in critical needs in education and health care.
“One proximate cause of poor health, education and nutrition standards is low public expenditure. This, in turn, is related to very low public revenues due in fact to low tax rates and weak systems for tax collection. Low social spending is also as a result of transfers from government to petroleum and power sectors, because fuel and electricity tariffs are below cost recovery levels,” he said.
Attributing poor social development to crises across the country, Haykin said, “Fiscal, trade and other micro-economic policies tend to act as breaks on private sector initiatives on economic growth. Weak governance due to inadequate capacities or lacks of checks and balances also slows social and economic development.”
Also speaking at the event, a former Minister of Health, Muhammad Pate, said that about 40 per cent of under-five children in Nigeria were experiencing stunted growth.
Pate, who is currently an adjunct professor of global health at the Duke University, in his keynote presentation noted that the Nigerian political elite were serving themselves rather than the people.
According to him, ”after extracting almost a trillion dollars’ worth of oil since our national independence, we have a situation where poverty is going on. We have effectively squandered an opportunity to utilise the natural resources that we obtain purely by chance, not by hard work.
“Instead of investing to uplift our people’s lives, our political elites by commission or omission choose the path of short-term comfort and purchase of loyalty through economically unwise or corruption riddled national expenditure at the expense of economically sound investments in both human and physical aspects to transform our nation.
“For a country to realise its demographic dividends, it must first undergo demographic transition, which means a shift from high fertility and high child mortality to relatively lower fertility and child mortality.”