PRESS STATEMENT ON CURRENT FUEL
SITUATION
We have just finished a meeting of
various stakeholders presided over by His Excellency, the Vice President of the
Federal Republic of Nigeria.
The meeting had in attendance the
Leadership of the Senate, House of Representatives, Governors Forum, and Labour
Unions (NLC, TUC, NUPENG, and PENGASSAN).
The meeting reviewed:
1. The current fuel scarcity and
supply difficulties in the country.
2. The exorbitant prices being paid
by Nigerians for the product. These prices range on the average from N150 to
N250 per litre currently.
3. The meeting also noted that the
main reason for the current problem is the inability of importers of petroleum
products to source foreign exchange at the official rate due to the massive
decline of foreign exchange earnings of the federal government. As a result,
private marketers have been unable to meet their approximate 50% portion of
total national supply of PMS.
Following a detailed presentation by
the Honorable Minister of State for Petroleum Resources, it has now become
obvious that the only option and course of action now open to the government is
to take the following decisions:
1. In order to increase and
stabilise the supply of the product, any Nigerian entity is now free to import
the product, subject to existing quality specifications and other guidelines
issued by Regulatory Agencies.
2. All Oil Marketers will be allowed
to import PMS on the basis of FOREX procured from secondary sources and
accordingly PPPRA template will reflect this in the pricing of the product.
Pursuant to this, PPPRA has informed
me that it will be announcing a new price band effective today, 11th May, 2016
and that the new price for PMS will not be above N145 per litre.
We expect that this new policy will
lead to improved supply and competition and eventually drive down pump prices,
as we have experienced with diesel. In addition, this will also lead to
increased product availability and encourage investments in refineries and
other parts of the downstream sector. It will also prevent diversion of
petroleum products and set a stable environment for the downstream sector in
Nigeria.
We share the pains of Nigerians but,
as we have constantly said, the inherited difficulties of the past and the
challenges of the current times imply that we must take difficult decisions on
these sorts of critical national issues. Along with this decision, the federal
government has in the 2016 budget made an unprecedented social protection
provision to cushion the current challenges.
We believe in the long term, that
improved supply and competition will drive down prices.
The DPR and PPPRA have been mandated
to ensure strict regulatory compliance including dealing decisively with anyone
involved in hoarding petroleum products.
Thank you.
SIGNED
HONOURABLE MINISTER OF STATE FOR
PETROLEUM RESOURCES
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