Minister of State for Petroleum, Mr. Ibe Kachikwu, Wednesday, defended the hike in the 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.
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.”
“We have just finished a meeting of various stakeholders presided over by His Excellency, the Vice President of the Federal Republic of Nigeria,” Kachikwu told State House Correspondents on the resolution of the meeting.
“The meeting had in attendance the Leadership of the Senate, House of Representatives, Governors Forum, and Labour Unions (NLC, TUC, NUPENG, and PENGASSAN).
According to Kachikwu, 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.
“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,” Kachikwu said.