Press Statement On Fuel Subsidy Removal In Nigeria By Kachikwu

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PRESS STATEMENT ON CURRENT FUEL
SITUATION IN NIGERIA
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
HONOURABLE MINISTER OF STATE FOR
PETROLEUM RESOURCES

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