FG reduces fuel price to N87, but marketers fail to comply

fuel price in Nigeriafuel price in NigeriaThe Federal Government yesterday reduced the pomp price of petrol (PMS) to N87 per litre effective from midnight of January 18 2015.

Minister of Petroleum Resources, Dieziani Alison-Madueke, announced this while addressing State House correspondents. She said the Petroleum Products Prices Regulatory Agency (PPPRA) and the Directorate of Petroleum Resources (DPR) had been directed to effect the price change with immediate effect.

The minister attributed the price change to the decline in global price of crude oil.

Meanwhile, the Petroleum Products Pricing Regulatory Agency, PPPRA, further fixed the Ex-Depot price of petrol at N77.66 per litre, contrary to the information on its website, which put the Expected Open Market Price at N97.90 per litre.
The Executive Secretary of PPPRA, Mr. Farouk Ahmed, explained in a statement issued last night in Abuja that, the development is on account of announcement of a downward review of the pump-price of petrol from N97 to N87per litre by the government.

Indeed, the price slash had come as a big surprise to all, particularly the marketers, who are now counting their losses from their stock pile.

Newsmen reliably gathered that the marketers and petroleum depot operators were taken by surprise by the announcement, resulting in a hastily arranged meeting with stakeholders in Abuja yesterday.

The word was mum among attendants at the meeting, which kicked off by 12 noon and lasted for many hours behind closed doors, with no operator willing to speak on the agenda for the meeting.

However, those who confided in newsmen reported the losses are better imagined, as many had borrowed to pile up stock, seeing as the government had not responded in any way since the crude oil market crash last year.

APC’s Mohammed said the pump price of a litre of fuel should not exceed N70, meaning that at N87 per litre, the Federal Government is forcing Nigerians to still subsidise the massive corruption in the oil sector by N17 for every litre of fuel.
He further called on the federal government to immediately slash the price of petrol to N70 per litre and the prices of diesel and kerosene to nothing more than N90 per litre each way.

He said, “When crude oil was selling at $100 per barrel, the landing cost of PMS without subsidy was N125 per litre. Now that the oil price has crashed to about $44 per barrel, landing cost without subsidy is about N65 per litre. The same goes for diesel which should not sell for more than N90 per litre.”

Also speaking, Mallam Garba Shehu, Director of Media and Publicity of the APC Presidential Campaign, described the slash in the pump price of petrol by the federal government as, a panicky political measure which falls far too short of the people’s expectation and contrary to the 50 per cent relief suggested by the Buhari Team.

In a statement in Abuja on Monday, Shehu said that “The Jonathan-led PDP government is beginning to listen to public outcry about bad governance, extortion and exploitation of the Nigerian masses in the oil sector where billions of naira are daily being ripped off the pockets of the common men and women through inaccurate pump prices of petrol, diesel and kerosene, despite the dwindling world market prices of these products.”

In his reaction, Chairman, Senate Committee on Federal Capital Territory (FCT), Senator Smart Adeyemi, commended the Federal Government for its decision to reduce the pump price.
Adeyemi stated that the reduction showed that the government of President Goodluck Jonathan is sensitive to the plight as well as the wishes and aspirations of the people.

According to him, “This is the first time the government voluntarily, without strikes and protests reduced pump price of petroleum products. This is a step in the right direction and it will surely ginger socio-economic activities.
Similarly, Mr David Adonri, Chief Executive Officer, Highcap Securities Limited, said the reduction is a welcome development, advising however, that the Federal Government should deregulate the sector and allow the forces of supply and demand to determine price.

He said, “The reduction of pump price by N10 was a pleasant surprise but since morning, fuel stations have failed to implement the directive. However, the commodity is still under public price control. It is better to deregulate and allow the forces of supply and demand determine the price.”

Also, the Nigeria Labour Congress, NLC, welcomed the reduction, but insisted that it fell short of expectation.

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