FG caps fuel price at N145 per litre
The Federal Government has increased the price of petroleum from N86.50 to a maximum of N145 per litre.
The 80% increase was announced to State House reporters yesterday by the minister of State for Petroleum Ibe Kachikwu.
The 80% increase was announced to State House reporters yesterday by the minister of State for Petroleum Ibe Kachikwu.
The minister said the Petroleum Products
Pricing Regulatory Agency (PPPRA) and the Department of Petroleum
Resources (DPR) had been mandated to ensure strict regulatory compliance
including dealing decisively with anyone involved in hoarding petrol.
Kachikwu said the decision to increase the fuel price was arrived at a
meeting of various stakeholders presided over by Vice President Yemi
Osinbajo at the State House, Abuja, yesterday.
He said the meeting was attended by the leadership of the two chambers of the National Assembly, the Nigeria Governors Forum, and the labour unions including the NLC, TUC, NUPENG and PENGASSAN.
The minister said: “The meeting reviewed: 1. The current fuel scarcity and supply difficulties in the country.
2. The exorbitant prices being paid by Nigerians for the product. These prices range on the average from N150 to N250 per litre currently.
3. “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.”
Kachikwu said following his detailed presentation, it became obvious that the only option and course of action now open to the government was to take the following decisions:
“1. 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.
“2. 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.”
The minister said the government expected that this new policy would lead to improved supply and competition and eventually drive down pump prices as experienced with diesel.
He said this would also lead to increased product availability and encourage investments in refineries and other parts of the downstream sector as well as 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,” he stated.
He added that along with this decision, the federal government had in the 2016 budget made an unprecedented social protection provision to cushion the current challenges.
He said the government believed in the long term that improved supply and competition would drive down prices.
The PPPRA in a separate statement by the acting Executive Director Sotonye E. Iyoyo said it was conscious of the difficulties that Nigerians had been going through in the last few months.
To ameliorate the situation, he said, the agency would continue to modulate pricing in accordance with prevailing market dynamics thereby ensuring fair value to all Citizens.
He said the meeting was attended by the leadership of the two chambers of the National Assembly, the Nigeria Governors Forum, and the labour unions including the NLC, TUC, NUPENG and PENGASSAN.
The minister said: “The meeting reviewed: 1. The current fuel scarcity and supply difficulties in the country.
2. The exorbitant prices being paid by Nigerians for the product. These prices range on the average from N150 to N250 per litre currently.
3. “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.”
Kachikwu said following his detailed presentation, it became obvious that the only option and course of action now open to the government was to take the following decisions:
“1. 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.
“2. 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.”
The minister said the government expected that this new policy would lead to improved supply and competition and eventually drive down pump prices as experienced with diesel.
He said this would also lead to increased product availability and encourage investments in refineries and other parts of the downstream sector as well as 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,” he stated.
He added that along with this decision, the federal government had in the 2016 budget made an unprecedented social protection provision to cushion the current challenges.
He said the government believed in the long term that improved supply and competition would drive down prices.
The PPPRA in a separate statement by the acting Executive Director Sotonye E. Iyoyo said it was conscious of the difficulties that Nigerians had been going through in the last few months.
To ameliorate the situation, he said, the agency would continue to modulate pricing in accordance with prevailing market dynamics thereby ensuring fair value to all Citizens.
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