The Minister of State for Petroleum, Dr. Ibe Kachikwu, has said the Nigerian government has suspended the subsidy on petroleum products as at 27th December, as a result of the current low price of crude in the international market.
Kachikwu said the non-payment of subsidy would remain the same, as long as market trends allow.
He made the revelation on Sunday in Kaduna, saying if crude prices increase, there would be a review which would be tackled under the newly introduced price modulation in the sector.
According to the Kachikwu, the price modulation, is not an outright removal of petrol subsidy.
Earlier on 17th December, the Minister had said that the government was not interested in the removal of subsidy on petroleum products, but rather a price modulation that would reduce its involvement in pricing starting 2016.
He explained that a periodical review of the Petroleum Pricing Template and a flexible management of the pricing system would be considered.
The price modulation, the government stressed, would be predicated on a 97 Naira per litre projection, which would be a cap on the price of fuel with a gradual increment between the band of the current price of 87 Naira and 97 Naira until a fair price is reached in the pricing review.
Few days after he announced plans for a price modulation, he told reporters that the Nigerian National Petroleum Corporation would announce a pump price of 85 Naira per litre of petrol in January 2016.
Kachikwu noted that the new pump price was according to a PPPRA template which he signed off on Wednesday.
He said the price would be the first reflection of the price modulation that will kick off fully in the petroleum sector by January 2016.
Following his inspection of the refinery in Kaduna State on Sunday, two days after a tour of the Port Harcourt Refinery, Kachikwu revealed to journalists that a combined daily production of up to 10 million litres of petrol is expected from the four Nigerian refineries by January 2016. He explained that the production is aimed at cushioning the current scarcity of petrol across the country.
Currently the production from the refineries is only 50 per cent of a maximum production capacity of 20 million litres daily, however the minister said more locally refines petrol should be expected in 2016
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