The Minister of State for Petroleum Resources, Timipre Sylva, said the hike in the price of petrol was as a result of an American pharmaceutical company, Pfizer’s recent breakthrough in the fight against the COVID-19 pandemic.
Speaking with the State House correspondents after a closed-door meeting with President Muhammadu Buhari in Abuja on Monday, Mr Sylva said the announcement of a COVID-19 vaccine by Pfizer triggered a slight increase in the price of crude oil in the global market.
“What happened recently was because of the announcement of a vaccine for COVID-19 by Pfizer. With that, crude oil prices went up a little bit.
He said: “If you have been following crude oil prices, you would have seen that crude oil prices went up a little bit as a result of this announcement.
“So, when crude oil prices go up a little bit, then you will see that (it will) instantly reflect on the price of petrol, which is a derivative of crude oil.”
According to him, the pump price of petrol is directly determined by the price of crude oil in the global market.
He stated that it was not the first time the government would give the same explanation whenever the pump price of petrol changed in the country.
The minister explained that the government took the decision to deregulate the sector in order to ensure its optimum performance.
He said, “When the price of crude oil goes up, then it means that the price of the fixed stock has gone higher; it will also affect the price of the refined product and that is why you see that product prices are usually not static, it depends on the price of crude oil which goes up and down.
“That is why we say, deregulate so that as the price goes up or down, you begin to go up and down as well at the pump. Before now, we fixed it – which was not optimal for us as a country.”
Mr Sylva added that the nation’s earnings were not fixed because they were dependent on crude oil prices and fixing the pump price would be unsustainable at some point.
He stated that this was why the government decided to keep the price floating, to be determined by the price of crude oil in the international market.