- FG scraps fuel subsidy, dealers adjust price to N145/litre
- Confirms Nigerian Pilot’s Tuesday story
- Nigerians groan as transport fare, food prices soar
Federal Government yesterday jacked up the price of Premium Motor Spirit, PMS, otherwise called petrol, from the current retail pump price of N86 per litre to N145 per litre.
The decision was taken at a stakeholders meeting held at the Presidential Villa, Abuja, presided over by Vice-President Yemi Osinbajo with the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, and leadership of the Senate, House of Representatives, Nigeria Labour Congress, NLC, Trade Union Congress, TUC, Petroleum and Natural Gas Senior Staff Association, PENGASSAN, and the National Union of Petroleum and Natural Gas workers of Nigeria, NUPENG.
This is coming less than 24 hours after Dr Kachikwu announced that a new subsidy policy would soon be unveiled.
It also comes at a time when there are fuel scarcity and supply difficulties in the country.
It also coincides with the period of severe hardship across the country with many Nigerians finding it difficult to eke out a living.
On the other hand, the increase confirms Nigerian Pilot’s lead story of Tuesday this week captioned ‘Planned Fuel Price Hike: Queues Return to Filling Stations; FG to Deregulate the Sector, Petrol to Sale above N100/per litre.’
According to VP Osinbajo, “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.”
According to Kachikwu, “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).
He said the meeting reviewed: 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.
He said 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 percent portion of total national supply of PMS.
With the development, Kachikwu said the sector had been deregulated and “any Nigerian entity is now free to import the product, subject to existing quality specifications and other guidelines issued by regulatory agencies” while 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.”
On the possible backlash from the price increase, Kachikwu assured Nigerians that government would do something to cushion the effects but appealed for understanding.
“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.”
He said both the DPR and PPPRA have been mandated to ensure strict regulatory compliance including dealing decisively with anyone involved in hoarding petroleum products.
…Industrialists, motorists, consumers, marketers react to subsidy removal
Motorists, consumers and marketers yesterday reacted to government’s removal of fuel subsidy in different ways.
Whereas motorists especially commercial drivers saw it as an opportunity to make more money, private vehicle users described it as deadly blow to their already lean pockets. To product marketers, the increase would enable them to import and supply products at reasonable costs and reduce shortfalls.
However, consumers, workers and market traders said it would amount to further hardship and increase in prices of goods and services across the country.
Sam Okie, a motorist sited in a queue at the Total Filling Station, Zone 3 in Abuja yesterday, lamented that even with the subsidy removal and price increase, Nigerians still don’t feel any added advantage, stressing that it is a shame for a country with ample amount of fuel to be troubled by unavailability of the produce.
Ibrahim Jubril, the manager, NNPC Mega Filling Station around Wuse Zone 3, expressed delight in the subsidy removal, stating that “it’s a welcome idea because I see no reason why Abuja as the capital city will enjoy more fuel than other states. It’s difficult to buy fuel outside Abuja even with your money. But with this announcement, marketers will be willing to sale this product.”
A PMS consumer, Ahmed Musa said “if that is the best for Nigerians, then I must say, I welcome the subsidy removal. This will go a long way to correct the common problem of PMS between the government and these marketers. If this subsidy removal will remove queues and save time consuming this product, then I think this change is a welcome one – but if not we don’t want the removal.”
A car dealer, Alhaji Taye Jimoh expressed happiness when he said “the availability of the product is all that matters. If this will make the product available anytime, anywhere then it’s a welcome development.”
Mr. Jame Peter, a taxi driver, expressed mixed feelings about the removal.
“I must say it’s going to be a difficult one for Nigerians for the main time, but with time, we hope this painful change will be the source of our happiness.”