Breaking! Fuel subsidy removed; new price of fuel revealed
The federal government of Nigeria has removed subsidy on fuel and it will now start to sell for N145 per litre.
This removal was made on Wednesday, May 11.
Until the removal, the official price of petrol was N87 per litre although consumers have been paying as much as N200 for fuel due to scarcity.
The removal in fuel subsidy has been a lingering issue since President Muhammadu Buhari took over power.
The minister of state for petroleum product, Dr Emmanuel Ibe Kachikwu had said that the citizens were not benefitting from the subsidy which made it necessary to be removed.
An official in the petroleum industry had earlier said the federal government would deregulate the downstream sector of the Nigerian petroleum industry so as to put an end to scarcity.
The petroleum minister in a statement said the decision was taken based on the current challenges and that Nigerians have been paying exorbitant prices for fuel.
We have just finished a meeting of various stakeholders presided over by His Excellency, the Vice President of the Federal Republic of Nigeria.
The meeting had in attendance the Leadership of the Senate, House of Representatives, Governors Forum, and Labour Unions (NLC, TUC, NUPENG, and PENGASSAN).
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The meeting reviewed:
"The current fuel scarcity and supply difficulties in the country.
"The exorbitant prices being paid by Nigerians for the product. These prices range on the average from N150 to N250 per litre currently.
"The meeting also noted that the main reason for the current problem is the inability of importers of petroleum products to source foreign exchange at the official rate due to the massive decline of foreign exchange earnings of the federal government. As a result, private marketers have been unable to meet their approximate 50% portion of total national supply of PMS.
Following a detailed presentation by the Honorable Minister of State for Petroleum Resources, it has now become obvious that the only option and course of action now open to the government is to take the following decisions:
"In order to increase and stabilise the supply of the product, any Nigerian entity is now free to import the product, subject to existing quality specifications and other guidelines issued by Regulatory Agencies.
" All Oil Marketers will be allowed to import PMS on the basis of FOREX procured from secondary sources and accordingly PPPRA template will reflect this in the pricing of the product.
"Pursuant to this, PPPRA has informed me that it will be announcing a new price band effective today, 11th May, 2016 and that the new price for PMS will not be above N145 per litre.
"We expect that this new policy will lead to improved supply and competition and eventually drive down pump prices, as we have experienced with diesel. In addition, this will also lead to increased product availability and encourage investments in refineries and other parts of the downstream sector. It will also prevent diversion of petroleum products and set a stable environment for the downstream sector in Nigeria.
"We share the pains of Nigerians but, as we have constantly said, the inherited difficulties of the past and the challenges of the current times imply that we must take difficult decisions on these sorts of critical national issues. Along with this decision, the federal government has in the 2016 budget made an unprecedented social protection provision to cushion the current challenges.
"We believe in the long term, that improved supply and competition will drive down prices.
"The DPR and PPPRA have been mandated to ensure strict regulatory compliance including dealing decisively with anyone involved in hoarding petroleum products."
The vice president, Professor Yemi Osinbajo hinted earlier on Wednesday that Nigeria had reached a point where tough decisions had to be taken.
He said: “No matter how we slice it, we are in economic times that are challenging, but they provide us with some of the best opportunities for making a real difference in our economic life.
“I think that we are at a point that a lot has been said about subsidies and what to do with subsidies. I think we are at a point where we must make many difficult decisions and make very tough choices.
“But I think the Nigerian people are prepared for all what is required and all it would take to make a real difference. “In no way can a country make the kind of progress we expect it to make without being able to ensure that in public life our finance system is transparent and would ensure that there is accountability."
Source: Legit.ng
