“We are coming up with a new policy in the next few days that will allow our fuel price swing along with international pricing. We are now transiting into fuel modulating pricing, because we do not have sufficient foreign exchange to continue the fuel importation we have been doing,” Dr Emmanuel Ibe Kachikwu, Nigeria’s petroleum resources minister said during a town-hall event in Kaduna.
For months now, Nigerians have wondered whether the subsidy on premium motor spirit (PMS) will finally be yanked off by the federal government. Kachikwu’s latest comments provide the answer.
According to Premium Times, the minister said the introduction of price modulation mechanism early this year had helped stabilize the problem, pointing out that it was becoming necessary for the country’s oil sector to reflect global pricing of its fuel products.
To demonstrate the seriousness to end fuel subsidy payment in the country, Mr. Kachikwu said government deliberately did not have any budgetary allocation for fuel subsidy in the 2016 budget approved last week by the National Assembly.
Kachikwu also added that since the federal government managed to settle about N600 billion outstanding claims by marketers for subsidy inherited from the previous administration, it was determined not to continue paying fuel subsidy in the country.
He said since the NNPC did not also have the logistics and coverage for effective distribution of the product 100 per cent, it was necessary that the industry was opened up for effective participation by private operators.
Deregulating the downstream sector would effectively see the end of subsidy payment in the petroleum industry and likely push petrol prices to about N110 per litre at Nigerian National Petroleum Corporation, NNPC-owned filling stations and higher at other independent outlets.
The online newspaper also learnt on Tuesday that a new price band of between N135 and N145 per litre of fuel has been proposed for marketers under the regime, while adjustments would be made to the ex-depot price in the Petroleum Products Pricing Regulatory Agency, PPPRA pricing template.
The post Kachikwu: Petrol subsidy will soon be gone appeared first on Ekekeee.