…Says new price’ll ensure availability, crash price
From Juliana Taiwo- Obalonye, and Dennis Mernyi, Abuja
THE Federal Government yesterday hinted that subsidy regime on Premium Motor Spirit also known as petrol has ended and that the product will now sell for N145 per litre with immediate effect.
It also said the new price will lead to availability of products and competition among marketers which will eventually drive down the pump price.
Government said its decision to deregulate the down stream sector of the oil and gas industry will encourage investments in refineries and other segments of the industry, prevent diversion of petroleum products and set a stable environment for the downstream sector in Nigeria.
Briefing State House Correspondents at the end a meeting of various stakeholders presided over by the Vice President, Yemi Osinbajo, the Minister of State for Petroleum, Ibe Kachichwu, said the Petroleum Products Pricing Regulatory Agency (PPPRA) will announce a new price band “effective today, May 11, 2016,” adding that the new price for PMS “will not be above N145 per litre.”
He said the decision was reached in the meeting, which had in attendance the leadership of the Senate, House of Representatives, Governors Forum and Labour Unions (NLC, TUC, NUPENG and PENGASSAN), and that after reviewing the current fuel scarcity and supply difficulties in the country, the exorbitant prices being paid by Nigerians for the product ranging from N150 to N250 per litre currently and 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, resulting in private marketers’ inability to meet their approximate 50 per sent portion of total national supply of PMS.
Kachikwu said, “it has now become obvious that the only option and course of action 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, May 11, 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.”