The Federal Government on Wednesday announced the removal of subsidy on Premium Motor Spirit,PMS, otherwise known as petrol, which simply means that Nigerians will now have to buy the product for N145 per litre.This change in pump price from N86:50 to N145, represents a seventy percent increment.
The decision was reached today at a meeting of stakeholders, which had in attendance Leadership of the Senate, House of Representatives, Governors Forum, and Labour Unions (NLC, TUC, NUPENG, and PENGASSAN).
Announcing the subsidy removal, Ibe Kachikwu, Minister of state for Petroleum, said, “We have just concluded a meeting of various stakeholders presided over by His Excellency, the Vice President of the Federal Republic of Nigeria.
At the meeting, we reviewed following:
a.The current fuel scarcity and supply difficulties in the country.
b. The exorbitant prices being paid by Nigerians for the product. These prices range on the average from N150 to N250 per litre currently.
c. 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.
Continuing, he said,
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:
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.
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.” He added.
Fayose condemns petrol price increment, says “FG insensitive to Nigerians plight”
However, Ekiti State Governor, Mr Ayodele Fayose has condemned the increment from N86.50 to N145 of Premium Motor Spirit (PMS) otherwise known as petrol, describing it as insensitive and demonstration of the level of hatred the President Mohammadu Buhari led All Progressives Congress (APC) government had for Nigerians.
The governor, who said the over 70 per cent increment was another vindication of his predictions on what to expect in 2016, added that it was now clear that the scarcity of petrol being experienced in the last three months was deliberately orchestrated by the federal government to pave way for the already conceived increment.
According to his Special Assistant on Public Communications and New Media, Lere Olayinka, Governor Fayose said “Nigerians are now left at the mercy of political liars who took over power by deception and are governing by deceit.
He said he was waiting for the reaction of those who took to the streets to protest when fuel subsidy was removed by the Dr Goodluck Jonathan administration in 2012, urging labour unions in the country to stand by their members always, not minding the political party in government.
He said; “When they were seeking for votes from Nigerians, they promised to reduce petrol pump price to from N87 to N45 per litre, they promised to create three million jobs per year, they said $1 will be equal to N1 and above all, they promised to pay unemployed youths N5, 000 stipend and provide one meal a day to pupils nationwide.
“Instead of fulfilling their promises, they have increased petrol pump price to N145 per litre, increased electricity tariffs, retrenched thousands of workers and imposed untold hardships on Nigerians.
“As they did in 2012, if labour leaders do not also stand up for the people at this time, posterity will not forgive them.”
We Shall Resist This Increase – NLC
The unilateral increase in prices of petroleum products today by government represents the height of insensitivity and impunity and shall be resisted by the Nigeria Labour Congress and its civil society allies.
With the imposition on the citizenry of criminal and unjustifiable electricity tariff and resultant darkness and other economic challenges brought on by the devaluation of the Naira and spiraling inflation, the least one had expected at this point in time was another policy measure that would further make life more miserable for the ordinary Nigerian
The latest increase is the most audacious and cruel in the history of product price increase as It represents not only about 80 per cent increase but it is tied to the black market exchange rate.
Further more, the process through which government arrived at this is both illogical and illegal as the board of the PPPRA is not duly constituted. In our previous statements and communiques, we had stressed the need for reconstituting the boards of NNPC and PPPRA and wean both away from the overbearing influence of the Minister of State for Petroleum Resources who has assumed the role of a Sole Administrator.
The allusion to the fact that the this increase was arrived at after due consultation with stake holders is not only ridiculous and fallacious, it goes to show that the brief meeting held today during which government was advised shelve the idea until at least it meets with the appropriate organs of the Congress was in bad faith.
Accordingly, we urge the government to revert the prices to what they were. We would want to put everybody on notice that we shall resist this criminal increase with every means legitimate.
Already an emergency NEC meeting has been scheduled for Friday, May 13, 2016 to decide on the next line of action. Meanwhile, our affiliates, state councils and civil society allies are requested to commence mobilization immediately.
