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The pump price of Premium Motor Spirit (PMS), also known as petrol, will be reduced to N85 per litre on January 1 next year.
This was announced by Dr. Emmanuel Ibe Kachikwu, the minister of state for petroleum resources and group managing director of the Nigerian National Petroleum Corporation (NNPC), during a meeting with journalists at the Port Hacourt Refinery Company (PHRC).
Asked about the exact date the price will become effective Kachikwu said: “Like I said before, 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.”
He noted that the government’s analysis and research showed that the country can fluctuate the fuel market in accordance with the crude oil market fundamentals. According to Kachikwu, the new price for the Petroleum Product Pricing Regulation Agency (PPPRA), was approved this Thursday.
Speaking about the removal of the Petroleum Support Fund, known as oil subsidy, he explained that it was a necessary step, as the government cannot afford to subsidize the product following the fraud that has attended its operation.
Mr Kachikwu said: “It is out I signed off on Thursday. I imagined that in the next couple of days the marketers would get advice on that. The nice thing about the PPPRA, 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.”
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