Fuel to Sell for Not more than N145 as FG Removes Subsidy on PMS (Photos)

The press release was made available today.

Why fuel price became necessary

Premium Times report that the reason why labour is kicking, Petroleum Products Pricing Regulatory Agency (PPPRA) was explaining why the deregulation of the

downstream sector and the hike in fuel price was inevitable.

Acting Executive Secretary of the agency, Sotonye Iyoyo, said

the new price, which reflected a hike by about 67.6 per cent

from the previous N86.50 per litre, was to help marketers

overcome difficulties they were facing in fuel importation.

The N86.50 was the official fixed price by government under

the now defunct subsidy regime.

Under the subsidy regime, the government paid the difference

between the landing cost of fuel, including the marketers’ and

distributors’ margins, and the fixed retail price to enable fuel

to be sold at N86 per litre at NNPC-owned mega stations, and

N86.50 per litre in other filling stations.

With the take-off of the deregulation policy, the federal

government has formally removed subsidy from the PPPRA

pricing template.

The Minister of State for Petroleum Resources, Ibe Kachikwu,

who announced the policy change, said deregulation was

introduced in order to increase and stabilize the supply of

petroleum products in the country.

Mr. Kachikwu said any Nigerian entity with the right capacity

was now free to import and market fuel in the country, subject

to existing quality specifications and other guidelines issued by

PPPRA.

“All oil marketers will be allowed to import PMS (premium

motor spirit) on the basis of FOREX (foreign exchange)

procured from secondary sources and accordingly PPPRA

template will reflect this in the pricing of the product.

The PPPRA, the government agency responsible for moderating

petroleum product pricing in the petroleum industry,

explained that the review of the fuel price became necessary

in view of the difficulties petroleum products marketers

usually encounter in sourcing for FOREX.

“This review became imperative in the face of extreme

difficulties faced by petroleum product importers in sourcing

foreign exchange,” the executive secretary said in Abuja.

Mrs. Iyoyo, who also announced the second quarter price

modulation framework, which debuted on January 1, 2016, said

it was aimed at ensuring a ‘fit-for-all’ approach in the interest

of the Nigerian consumers, marketers and the economy.

She said the new framework approved a new price band for

PMS at a maximum of N145 per litre in other filling stations,

while NNPC retail stations would sell at a lower price.

To meet the country’s consumption demand, the PPPRA official

said fuel importers would henceforth be permitted to source

for foreign exchange from secondary sources outside the

Central Bank of Nigeria, CBN’s rate of N197 and N199 to the

dollar.

Mrs. Iyoyo, who said the agency was conscious of the

difficulties Nigerians were facing in the last few months,

explained that the PPPRA would continue to modulate pricing

in accordance with prevailing market dynamics to ensure fair

value to all.