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Mixed reactions trail Buhari’s fuel price reduction to N125

Juliana Obalonye (Abuja),  Bimbola Oyesola, Uche Usim (Abuja), Adewale Sanyaolu and Chinwendu Obienyi 

President Muhammadu Buhari yesterday approved a reduction in the price of Premium Motor Spirit (PMS), otherwise called petrol  from N145 to N125. 

This was even as the Federal Government also directed the Nigerian National Petroleum Corporation (NNPC) to reduce the Ex-Coastal and Ex-Depot prices of fuel to reflect current market realities.

Announcing the approval for price reduction yesterday, the Minister of State for Petroleum Resources, Chief Timipre Sylva, in a statement, also revealed that PPPRA would be doing a monthly guide to the Nigerian National Petroleum Corporation (NNPC) and marketers on pricing, in line with prevailing oil market price.

Sylva’s statement said: “The drop in crude oil prices has lowered the expected open market price of imported petrol below the official pump price of N145 per liter.

“In view of this situation based on the price modulation Template approved in 2015, the Federal Government is directing the Nigerian National Petroleum Corporation (NNPC) to reduce the Ex-Coastal and Ex-Depot prices of PMS to reflect current market realities.

“Also, the PPPRA shall subsequently issue a monthly guide to NNPC and marketers on the appropriate pricing regime.

“The agency is further directed to modulate pricing in accordance with prevailing market dynamics and respond appropriately to any further oil market development.

“It is believed that this measure will have a salutary effect on the economy, provide relief to Nigerians and offer a framework for sustainable supply of PMS to our country…”

This is not the first time the Federal Government, since the return of democracy in 1999, is reducing petrol price owing to drop in price of oil. President Goodluck Jonathan, in January 2015, reduced the price of PMS from N97 per litre to N87 when oil price dropped.

Critics saw Jonathan’s gesture as a political move to win Nigerians over, ahead of the 2015 elections, at that time.

The late President Umar Musa Yar’Adua also reduced the price of petrol on assumption of office. He reduced price from N75 to N65 per litre in June 2007.

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Consequently, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr.Mele Kyari, said in compliance with the directives of the Minister of State for Petroleum Resources on petrol pricing, the Corporation has reviewed its Ex-coastal, Ex-depot and NNPC Retail pump prices accordingly.

‘‘Effective March  19, 2020, NNPC Ex-Coastal price for PMS has been reviewed downwards from N117.6/litre to N99.44/litre while Ex-Depot price is reduced from N133.28/litre to N113.28/litre.

These reductions will therefore translate to N125/litre retail pump price.  Despite the obvious cost implication of this immediate adjustment to the Corporation, the NNPC is delighted to effect this massive reduction of N20/litre for the benefit of all Nigerians.

Accordingly, all NNPC Retail stations nationwide have been directed to change the retail pump price to N125/litre.’’

Commenting on the development, Chairman, Major Oil Marketers Association of Nigeria (MOMAN), Mr. Tunji Oyebanji, said the Association would support any policy initiative by the government that would bring succor to Nigerians at this trying period, especially in the wake of the outbreak of coronavirus which had negatively impacted oil prices

He however, said MOMAN has not received any official communication from the Petroleum Products Pricing Regulatory Agency(PPPRA) to that effect, adding that until such was communicated to it, implementation may not take effect.

In his reaction, President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Mr. Ndukaku Ohaeri, said the Federal Government’s decision to reduce petrol price is a welcome development and should be commended.

He said what Nigeria has done was in line with current trends in the global oil and gas industry as most countries are beginning to reduce pump price of petrol.

This was even as other economic experts who weighed in on the development described it as an excellent opportunity to end the opaque petrol subsidy regime which costs the country trillions of naira annually.

In a telephone chat with Daily Sun, Eze Onyekpere, the Lead Director, Centre for Social Justice, said the government has no business paying subsidies or adjusting the price of petrol when it ought to allow market forces dictate the price.

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He said: “This is an opportunity to let go of subsidy. There is no need hanging on subsidy payment. If you remove it now, Nigerians won’t lament and they will adjust when crude prices go up. But if you do it when the price is high, Nigerians will cry and shout. So, let the government seize the opportunity of this crash in crude oil presents”, he said.

According to Chief Sunny Nwosu, a prominent shareholder activist the Federal Government’s approach is not enough palliative for the suffering Nigerians are experiencing at the moment. For example, it is not every Nigerian that uses fuel. Again, there are fears out there regarding the CO-VID 19 and the truth is not every bus or taxis will bring down the cost of transportation and thus I see this move not really benefitting the common Nigerian. It is not the necessary palliative to be used.

The  Organised Private Sector (OPS) and the Organised Labour also hailed the government’s downward review of the pump  price of petroleum products from N145 to N125 in reaction to the crash of global price of crude last week.

However, the two expressed reservation, warning that it was only a short lived solution to Nigeria’s oil and gas problem determined by the international market.

The Lagos Chamber of Commerce and Industry (LCCI) noted that the slash in petrol price from N145 to N125 per litre is a welcome development, especially  in the light of the slump in global crude oil price.

The Director General, Muda Yusuf, who spoke with Daily Sun yesterday however said that what is desirable ultimately is for the Federal Government to come up with an exit strategy to pave the way for a complete liberalisation of the downstream oil sector.

According to him, there could not be any better time than now, “This is an opportune time to do so.”

Sunnews

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