Subsidy: Read what Lai Mohammed has told angry Nigerians
– The minister states reason for the increase in pump price
– Lists benefits of liberalisation
– Appeals for calm amid widespread murmur
The Nigerian government said on Friday it had no other choice than increase the pump price of premium motor spirit, also called petrol from N86.50 to N145 per litre.
Lai Mohammed, the minister of Information, said the policy has become inevitable in order to halt the crippling fuel scarcity in the country and ensure availability of the product.
Nigeria’s minister of Information and Culture, Alhaji Lai Mohammed. Photo: Michael Obasa
Mohammed, who stated this at the inauguration of the Advertisers Association of Nigeria (ADVAN) marketers conference in Lagos on Friday, said only the liberalisation of petrol supply will ensure the availability of the products.
“Distinguished ladies and gentlemen, I can tell you that that decision is inevitable, if we are to end the crippling fuel scarcity that has enveloped the country, ensure the availability of the products and end the suffering that our people have been subjected to.
“With the drastic fall in the price of crude oil, which is the nation’s main foreign exchange earner, there has also been a drastic reduction in the amount of foreign exchange available. The unavailability of forex and the inability to open letters of credit have forced marketers to stop product importation and imposed over 90% supply on the NNPC since October 2015, in contrast to the past where NNPC supplies 48% of the national requirement,” the Minister said.
READ ALSO: Abuja residents lament over fuel price increase (video)
He explained that in the absence of available forex lines or crude volumes to continue massive importation of petrol, it is clear that unless immediate action is taken to liberalise the petroleum supply and distribution, the queues will persist, diversion will worsen and the current prices will spiral out of control.
He stressed that the liberalisation of petrol supply and distribution will allow marketers and any Nigerian entity willing to supply petrol to source for forex and import the product to ensure availability in all locations of the country.
According to him, the resultant fuel scarcity has created an abnormal increase in price, resulting in Nigerians paying between N150 and N300 per litre as prevalent hoarding, smuggling and diversion of the product have reduced volumes made available to citizens.
“There is neither funding nor appropriation to cover this,” he explained.
On the benefits of the new price regime, he said it would end the recurrent fuel scarcity by ensuring product availability across the country, reduce hoarding, smuggling and diversion of products substantially, improve fuel supply situation through private sector participation, create labour market stability, as this will potentially create additional 200,000 jobs through new investments in refineries and retails and prevent potential loss of 400,000 jobs in existing investments.
Alhaji Mohammed gave the assurance that underthe new price regime, the Petroleum Products Pricing Regulatory Agency (PPPRA) and the Department of Petroleum Resources (DPR) will be further empowered to ensure a level playing field and strict compliance with market rules by all stakeholders.
Ozekhome who is particularly troubled by the removal of subsidy on premium motor spirit, also called petrol, told Vanguard in Abuja on Friday, that the government action was not only foolish, but also showed that the ruling All Progressives Congress (APC) has become clueless.
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