Saturday, 14 May 2016

New fuel pricing regime Best for the Country – Lai Mohammed




Nigeria Minister of Information, Alhaji Lai Mohammed, has described the new fuel pricing regime as inevitable and beneficial to Nigeria’s economy.
Mohammed, while delivering his keynote address at the Advertisers’ Association of Nigeria Marketers Conference on Friday in Lagos, said it was important for the government to carry the public along with its policies and programmes.
Speaking at the event, the Minister noted he was aware that many Nigerians had been asking why the government would introduce the new pricing regime at this time.
He said, “I can tell you that the decision is inevitable if we are to end the crippling fuel crisis that has enveloped the country; if we are to ensure the availability of the product and that the suffering that our people have been subjected to should be put to an end.”
Mohammed said the drastic fall in the price of crude oil has led to the reduction in the nation’s foreign exchange, which in turn led to the imposition of “over 90 per cent supply burden on the Nigerian National Petroleum Corporation since October 2015 in contrast with the past when the NNPC supplied only 48 per cent of the national requirement.”
He said that since the announcement of the new price regime, many people had interpreted it as the removal of fuel subsidy.
The Minister, however, said “there was no provision for subsidy in 2016 appropriation.
“The erstwhile Premium Motor Spirit price of N86.50 will have resulted in an estimate subsidy claim of N13.7 per litre, which translates to N16.4bn monthly. There is neither funding nor appropriation to cover this.
“Also, the renewed insurgency and pipeline vandalism in the Niger Delta has drastically reduced national crude oil production to 1.65 million barrels per day against the 2.2 million barrels per day planned for in the 2016 budget, thereby reducing income to the federation account and also affecting crude volumes for PMS conversion and impacting Federal Government’s forex earnings.”
Highlighting the benefits of the new fuel pricing, Mohammed said it would ensure the availability of the product and create jobs, among others.
He said, “It would resolve the current fuel scarcity by ensuring product availability across the country; reduce hoarding, smuggling and diversion of products substantially and stabilise price; ensure market stability and improve fuel supply situation through private sector participation; create labour market stability and potentially create additional 200,000 jobs through new investments in refineries and retails and prevent potential loss of 400,000 existing jobs and investment.”
The Minister said the Federal Government would further empower its relevant agencies to ensure that stakeholders and players in the industry follow “strict market rules.”
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