Petrol now N145/litre as FG removes subsidy

By our Correspondent

The Federal Government has announced the removed of subsidy on Premium Motor Spirit (PMS) otherwise called petrol  even as the Petroleum Products Pricing Regulatory Agency (PPPRA) has released the new price of N145 per litre from N86, with immediate effect.

Speaking in Abuja today, Minister of State Petroleum, Dr Ibe Kachikwu said the decision was reached at a stakeholders meeting attended by  the leadership of the Senate, House of Representatives, Governors Forum and labour unions including the NLC, TUC, NUPENG, and PENGASSAN.

The minister said that the main reason for the current problem was 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, adding that as a result private marketers have been unable to meet their approximate 50 per cent portion of total national supply of PMS.

According to him,“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).

“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.

“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.

“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,” He stated.

Indication that something was in the offing regarding deregulation of the downstream sector emerged  in the early afternoon when the Chairman, House of Representatives Committee on Downstream Sector, Hon. Joseph Akinlaja who  was in Lagos today and called for support for the deregulation of the downstream sector of the economy.

He  maintained that the solution to the frequent fuel scarcity in the country was deregulation of the downstream sector, a feat he reportedly said that will not only give equal opportunity to all operators but also allow market forces to guide the sector.

Akinlaja said regulation in a society that is not well disciplined will continue to breed corruption as the common man which the policy seems to protect may be worse off at the end of the day.