government, has said that it can no longe
The Federal government, has said that it can no longer afford to subsidize the Premium Motor Spirit (PMS) following the fraud that has attended its operation, stressing that the product will sell for N85 per litre as from the first day of January, 2016.
The Minister of State
for Petroleum, Dr. Emmanuel Ibe Kachikwu broke the news to journalists in the
Port Hacourt Refinery Company (PHRC), where he spent Christmas inspecting the
plant.
Pressed to reveal when
the new price will become effective, Kachikwu, who is also the Group Managing
Director of the Nigerian National Petroleum Corporation (NNPC) said “like I
said, we have done a modulation calculation and it is showing us below N87. I
imagine that if PPPRA publishes it today, it will become effective immediately.
But the 1st of January that is when we are looking at.”
According to him, the
new price is below the current N87 per litre and it would now convince
Nigerians that the pricing modulation that the Federal Government promised to
embark on a few days ago was not a trick.
He noted that following government’s analysis and research, it has been
realized that the country can fluctuate the fuel market in accordance with the
crude oil market fundamentals.
Justifying government’s
reasons for scrapping the Petroleum Support Fund otherwise known as oil
subsidy, Kachikwu explained that government can no longer afford to subsidize
the product following the fraud that has attended its operation.
He added that it has
become clear that government earnings are dipping on daily basis.
His words: “It is out I
signed off on it yesterday (Thursday). I imagined that in the next couple of
days the marketers would get advice on that. The nice thing about the PPPRA,
where I signed up on it yesterday is that the price will be far below N87.
So for the first time
people will understand that the pricing modulation I was talking about is not a
gimmick. It is for real. We have gone to find out how we will be able fluctuate
this market to reflect what the reality of crude market is. The objective is
that one, we cannot afford to continue to subsidize .
We can’t even understand
where those subsidies were going to. There is a lot of fraud elements in it so
we need to cut that of.
The second is the
earning capacity of the Federal Government is deteriorating by the day with
lower prices of crude and come out more.”
He submitted that from the application market realities for the pricing
modulation, government has discoverd that petrol would sell for either N85 or
N86 per litre.
The minister recalled
that it was from this axiom that President Muhammadu Buhari announced that the
price of petrol remains N87 at the moment.
Kachikwu said: “But in
applying that where we landed when we did the analysis for the very first time
was about N85 or N86 so it is below N87.
And maybe the first price that will come will reflect it. That was why Mr.
President said that prices will be N87 for now. And that is what we have in
mind.”
On the security of the
pipelines, he said that government had tried stopping the menace with military
intervention to no avail before it engaged some private contractors who had
worked with the majors for the crude pipeline management.
According to him, the
private contractors have taken over Atlas Cove, Mosimi and they would be extending
the surveillance to Ilorin between yesterday and today.
They will also look at
the Port Harcourt and Aba axis, he stressed.
The minister said that government is now beginning to have a clue of how to
tackle pipeline insecurity, adding that it is far more expensive to convey
petroleum and products through pipelines than trucking them by road.
He said from the briefing he got from the inspection of the refineries , they
are close to re-opening.
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