By: Our Correspondent
Government has finally removed subsidy from sale of Premium Motor Spirit, PMS, also known as petrol with immediate effect.
Minister of State for Petroleum, Mr. Ibe Kachikwu, Wednesday, defended the jerking up of pump price of Premium Motor Spirit, PMS, also known as fuel by the federal government from N86:50 to N145, saying that it was the only way out of the exorbitant prices of N150 to N250 Nigerians were subjected to at many filling stations across the country.
He however stated that government had articulated many social protection programmes in the 2016 budget to cushion the effect the hike may have on Nigerians.
Rising from a meeting chaired by Vice President, Yemi Osinabjo which also had other various stakeholders including the Leadership of the Senate, House of Representatives, Nigerian Governors Forum, and Labour Unions (NLC, TUC, NUPENG, and PENGASSAN), at the Aguda House, official residence of the Vice President, Kachikwu noted that “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% portion of total national supply of PMS.”
The minister who briefed the State House Correspondents on the resolution of the meeting said that to wet the country with fuel, any Nigerian entity was now free to import the product, subject to existing quality specifications and other guidelines issued by Regulatory Agencies. “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). 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% portion of total national supply of PMS.
“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: “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.”
Meanwhile, angered over the sudden removal of fuel subsidy without consideration for workers wage increase, the Nigeria Labor Congress, NLC, is mobilizing its members nationwide to go on strike.
NLC in a statement signed by its Secretary General, Peter Ozo Eson said the decision of the Government is a display of insensitivity and impunity, vowing to resist it.
The statement reads: We Shall Resist This Increase.
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.
Furthermore, 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.
