Thursday, 12 May 2016

Breaking! Fuel subsidy removed; new price of fuel revealed

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.
Ibe Kachikwu and President Muhammadu
Buhari
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.
In a previous post NNPC Fuel Stations will be selling at the rate of N135-N145 according to Dr Emmanuel Ibe Kachikwu