Nigerian President Muhammadu Buhari on Thursday announced new petrol pump prices while outlining the reasons for the increase.

Buhari made the announcement on Thursday as he delivered a speech to mark the West African nation's 60th independence anniversary.

Buhari said the country will not be able to sustain its low petrol prices and that a "responsible government must face realities and take tough decisions" given the significant economic challenges facing it.

These challenges, including steep drops in foreign exchange earnings and internal revenues, were as a result of plunges in oil prices and economic activities which led to a 60 percent fall in government revenue, according to the president.

"Petroleum prices in Nigeria are to be adjusted. We sell now at N161 per litre."

In September, the government had announced an increase in the pump price of petrol to N151.56 per litre from N148. This was the third such increase in three months.

Buhari said the challenge of saving lives and livelihoods in the wake of drastically reduced resources meant sustaining the level of petroleum prices was “no longer possible.”

"The government, since coming into office has recognized the economic argument for adjusting the price of petroleum. But the social argument about the knock-on effect of any adjustment weighed heavily with the government," he said.

He also drew comparisons with some of Nigeria's neighbours and other oil producing countries all of which have higher petrol prices than Nigeria.

"Chad which is an oil producing country charges N362 per litre; Niger, also an oil producing country sells 1 litre at N346. In Ghana, another oil producing country, petroleum pump price is N326 per litre."

"Further afield, Egypt charges N211 per litre. Saudi Arabia charges N168 per litre."

"It makes no sense for oil to be cheaper in Nigeria than in Saudi Arabia," he said.

He also defended his administration by outlining programmes rolled out by it to support the economy and the most vulnerable members of society.

"No government in the past did what we are doing with such scarce resources. We have managed to keep things going in spite of the disproportionate spending on security," he noted.

Buhari's administration has faced a public backlash following a move to do away with the petrol subsidy which has kept a cap on pump prices. The cap on petrol prices, however, came at a cost as Nigeria's coffers have been drained of billions of dollars.

(With input from agencies)