By Nneka Nwogwugwu
The Federal Government has revealed what will happen to Nigeria after the increase in petrol pump price as crude oil price climbs above $60 per barrel.
Naturenews recalls that the Brent oil prices have increased to $60 a barrel on Monday for the first time in more than a year.
The increase has led to investors growing increasingly optimistic about demand as the global economy recovers from the coronavirus pandemic.
The commodity climbed 1.26 percent to $60.19 a barrel, its highest since January last year and as asset markets rallied on the back of vaccine rollouts, slowing virus infections and hopes that President Joe Biden’s huge stimulus proposal will be passed by US lawmakers.
Crude has been on the rise for weeks as Biden pushes his $1.9 trillion rescue package, which includes big cash handouts and a hike in the minimum wage, AFP reports.
The Minister of State, Petroleum Resources, Chief Timipre Sylva advised Nigerians to be ready to bear the pains of increased petrol pump price as crude oil price climbs above $60 per barrel.
Sylva stated this at the official launch of the Nigerian Upstream Cost Optimisation Program on Tuesday.
He said that with no provision of subsidy in the 2021 budget, Nigerian National Petroleum Corporation, NNPC, cannot continue to bear the cost of under-recovery.
Presently, the pump price of petrol ranges from N160 –N165, the price set when crude traded just above $43 per barrel, four months ago.
He said: “Since we are optimizing everything, NNPC needs to also think about the optimization of product cost because as we all know oil prices are where they are today, $60. “As desirable as this is, this has serious consequences as well on product prices. So we want to take the pleasure and we should as a country be ready to take the pain.
“Today the NNPC is taking a big hit from this. We all know that there is no provision in the budget for subsidy. “So, somewhere down the line, I believe that the NNPC cannot continue to take this blow. There is no way because there is no provision for it.
“As a country, let us take the benefits of the higher crude oil prices and I hope we will also be ready to take a little pain on the side of higher product prices”, he stated.