FG DEFENDS PETROLEUM PRIZE INCREASE

The Minister of State for Petroleum, Ibe Kachikwu, on Wednesday May 11, 2016 offered explanations on why the Federal Government decided to removed subsidy on petrol and consented to jerking up the price.

Available information on Wednesday had it that the Federal Government has given importers the latitude to sell at any price but not above N145.

Before now, while government-run Nigerian National Petroleum Corporation sold petrol for N86, others were selling for N86.50.

Explaining the rationale behind the decision to remove subsidy on petrol, Kachikwu said it was the only way out of the exorbitant prices that Nigerians were subjected to buying the commodity at many filling stations across the country.

After a meeting chaired by Vice President Yemi Osinabjo which also had various stakeholders, including the leadership of the National Assembly, Nigerian Governors Forum and Labour Unions, Kachikwu said: “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 per cent portion of total national supply of PMS.”

Speaking with State House correspondents, Kachikwu added: “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.
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 per cent portion of total national supply of PMS.

Following a detailed presentation by the Honourable 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.”

This development has not gone down well with many Nigerians. The Nigeria Labour Congress (NLC) has vigorously condemned the increase in prize of petroleum products, as reported by Footprints. (See LABOUR UNIONS REJECT PUMP PRIZE INCREASE.)

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About Dr. Ken

Medical Doctor, Publisher, Editor, Novelist, Playwright, Visionary Poet, Activist, Blogger
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15 Responses to FG DEFENDS PETROLEUM PRIZE INCREASE

  1. Steve says:

    There is no doubt that this quasi deregulation is a treatment option for the ailing oil sector. The APC has however chosen an option that is most convenient for them but with the most terrible complications on the masses.

  2. Anonymous says:

    All of una shouting change, Sai Baba! Now, fuel price has been officially pegged at #145/L. APC… All Promises Cancelled! What a scam!!!

  3. Mark says:

    Electric bills on the rise, fuel price on the rise, salaries the same, no skipping and no tomato to buy for martet sef… SMH!

  4. Audu says:

    I don’t know why this decision was taken but I know the President has nothing but good intentions for Nigerians.

  5. Prechy says:

    15 minutes after Ibe Kachikwu announces removal of subsidy, taxi fares in Abuja soars by 100%.

    Welcome to Change!

  6. Mohammed says:

    Patroitism is supporting your commander in chief, even if you don’t agree with everything he’s doing.

  7. Isah says:

    We all know that its better for subsidy to go. What needed to be done is expanding social welfare to the people, increase minimum wage profusely, extend safety net to the poor, subsidize education further and reduce taxes. These are stuffs that can put more money in people’s pockets and reduce the effect of fuel price increase.

  8. Chris says:

    I remember those Anti-Jonathan people solving equations on how fuel price will be 45 naira. Now its 145 naira.

    Positive change!

  9. Anon says:

    Buhari doesn’t know about Economy and Mathematics. It shows in his results.

  10. Johnny says:

    Defending this fuel hike as against 2012 is simply sheer hypocrisy because they were same policy.

  11. Prechy says:

    Can we recollect what Buhari & Osinbajo said about Fuel Subsidy during GEJ’s time? They said it was all nonsense!

    What do we have now? Who’s deceiving who?

  12. Dr. Zainab says:

    Sincerely, I don’t know why some people are defending this Govt. A country where a doctor cannot afford tomatoes?? A country where tomatoes that use to sell N80 3 weeks ago is now N500 as of last week??

    And Govt is still increasing pump price?? Do we take into consideration that some people’s salary is N18,000 at the end of d month???

  13. Mohammed says:

    I thought the new Sherriff was voted in because the last man was clueless? Don’t tell me this new Sherriff is brainless!

    Some people have been fantastically hypnotized.

    Lol!

  14. Anonymous says:

    We are not defending the govt but what u people are looking for can not happen too soon. Pres. Buhari once said that judiciary was his headache, meaning they are not doing what is expected of them and if he wants to exercise his power people will say he is a dictator.

    Fuel is up but what is needed now is to open up the market for competition. Some will sell 135, 140, 145. U now have a choice of where to buy. Mind u we are all in Nigeria and all of us is affected. If NLC and others protest and d price come down to say 100-120/litter better for every body but all of u need to sacrifice. By the time 50 importers start bringing in fuel and sell at different price it will better than when 5 business men are involve.

  15. Omede says:

    Epic Flashbacks

    Read what Malam Nasir El-Rufai said in one of his Interviews with Vanguard newspaper on January, 08, 2012.

    “If another government was in power, let us assume General Buhari was the President of Nigeria, he would not withdraw the subsidy. He will fix the problem. He will audit who is taking the money in the subsidy, who is paying what, how the money multiply three times in one year and fish out the thieves and deal with them”.

    The journalist asked Elrufai the following question and read what he said…

    “So, why do you think Jonathan lacks the political will to deal with them?”

    “Because they financed his election. But Buhari would have sorted that out. That is the first thing to do. Now, while you are paying the subsidy, even one quarter of what you are paying is a lot. General Buhari’s administration would have ensured that within 12 months all the refineries are working at full capacity. His administration would have built the fourth refinery that will bring our domestic production to the point that we don’t need to import a single drop of petrol. And once we can produce our petrol from our own crude oil, at out own cost, we can sell it at any price we like. That is what Buhari’s government would have done. Nigerians made a very big mistake for not electing Buhari, and they are learning every day. Many people have told me that they voted for Jonathan and they are regretting it now.”

    He continued, “There is no question of Buhari withdrawing subsidy because he has been Petroleum Minister, Chairman of Petroleum Trust Fund (PTF) and so on. He built three out of the four refineries we have in this country. And he built that out of patriotism to ensure that we can produce domestically. So, the question of withdrawing subsidy would not even be on the table”.

    Chai! Dere is God ooo

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