The Nigerian Federal government has announced a full deregulation of the
downstream sector of the country’s petroleum industry, pushing the price of
petrol to about N145 a litre.
The Minister of State for Petroleum, Ibe Kachikwu, announced the policy
change in Abuja on Wednesday afternoon.
According to the minister: “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,”
Mr. Kachikwu said.
“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.”
PRESS STATEMENT ON CURRENT FUEL SITUATION
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:
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.
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.
Thank you.
SIGNED
A
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