The government of Nigeria has announced that the introduction of a new price regime for Premium Motor Spirit (petrol) has become inevitable in order to halt the crippling fuel scarcity in the country and ensure availability of the product.
This is even as the Minister of Information and Culture, Alhaji Lai Mohammed, said that the development is aimed at tackling the hardship faced by Nigerians, as it would lead to the creation of additional 200,000 jobs in the country.
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Speaking at the inauguration of the Advertisers Association of Nigeria (ADVAN) Marketers Conference in Lagos on Friday, the minister said only the liberalization of petrol supply will ensure the availability of the products.
His words: “Distinguished ladies and gentlemen, I can tell you that the 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.”
He said the crash in the price of crude oil, which has impacted negatively on foreign exchange earnings, has further compounded the crisis in fuel supply.
“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.
He explained that the new fuel price regime should not be misconstrued as the removal of subsidy since there is no provision for subsidy in the 2016 Appropriation, saying the erstwhile PMS price of N86.50 gives an estimate subsidy claim of N13.7per litre which translates to N16.4 billion monthly.
“There is neither funding nor appropriation to cover this,” he said.
While listing the benefits of the new price regime, Alhaji Mohammed said it would end the recurrent fuel scarcity by ensuring product availability across the country, reduce hoarding, smuggling and diversion of products substantially, improves fuel supply situation through private sector participation, creates labour market stability, as this will potentially create additional 200,000 jobs through new investments in refineries and retails and prevents potential loss of 400,000 jobs in existing investments”.