Government has finally removed subsidy from sale of Premium Motor Spirit,
PMS, also known as petrol with immediate effect.
Minister of State for Petroleum, Mr. Ibe Kachikwu, Wednesday, defended the
jerking up of pump price of Premium Motor Spirit, PMS, also known as fuel
by the federal government from N86:50 to N145, saying that it was the only
way out of the exorbitant prices of N150 to N250 Nigerians were subjected
to at many filling stations across the country.
He however stated that government had articulated many social protection
programmes in the 2016 budget to cushion the effect the hike may have on
Nigerians.
Rising from a meeting chaired by Vice President, Yemi Osinabjo which also
had other various stakeholders including the Leadership of the Senate,
House of Representatives, Nigerian Governors Forum, and Labour Unions
(NLC, TUC, NUPENG, and PENGASSAN), at the Aguda House, official residence
of the Vice President, Kachikwu noted that “the 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.”
The minister who briefed the State House Correspondents on the resolution
of the meeting said that to wet the country with fuel, any Nigerian entity
was now free to import the product, subject to existing quality
specifications and other guidelines issued by Regulatory Agencies. “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.
“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.”