The Minister of Information and Culture, Alhaji Lai Mohammed has said that the Federal Government's decision to hike the price of Premium Motor Spirit, otherwise known as petrol, from N86.50 to N145.00 was inevitable.

Speaking at the Advertisers Association of Nigeria (ADVAN) Marketers Conference in Lagos yesterday, Mohammed argued that the increment was needed to end the crippling fuel scarcity in the country and ensure availability of the product to Nigerians.

The Minister said the decision would benefit the country as it would ensure product availability across the country, reduce hoarding, smuggling and diversion of products substantially and stabilise price.

He added that the decision would improve fuel supply situation through private sector participation and create labour market stability, noting that it would potentially create additional 200,000 jobs through new investments in refineries and retails, and prevent potential loss of 400,000 jobs in existing investments.

Mohammed explained that the drastic fall in the price of crude oil, which is the nation's main foreign exchange earner, has caused a drastic reduction in the amount of foreign exchange available.

According to him, "the unavailability of forex and the inability to open letter of credit have forced marketers to stop product importation and imposed over 90 per cent supply on the NNPC since October 2015, in contrast to the past where NNPC supplied 48 per cent of the national requirement."

Noting that the aim of his meeting with ADVAN was part of government efforts to bridge the communication gap between the government and the governed, the Minister said the truth behind the decision is that the NNPC no longer have the resources to ensure increase in supply.

"The result is the crippling fuel situation across the country. Pushed to supply 90 per cent of the products required for domestic consumption, the NNPC has continued to utilise crude oil volumes outside the 445,000 barrels/day allocated to it, thereby creating major funding and remittance gaps into the Federation Account," he said.