The government has removed the subsidy for petrol and the PPPRA has announced the new price as US$0.73 per litre, up from US$0.43. This is in furtherance of the Price modulation framework rolled out in January 2016 which entails modulating prices down or up on a periodic basis to reflect actual prevailing costs.
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The most common modes of transporting PMS in Nigeria are via pipelines and trucking.
There is no foreign currency and ways to open a new line of credit to bring in more products.
Even with the new price regime, Nigeria would remain one of the cheapest fuel markets in Africa and this could even be lower once competition tokes effect. However, there has been different reactions from different individuals and bodies as a result of this action.It is based on this that INFORMATION NIGERIA has put together prominent reactions trailing the new petrol price.
The new policy aims to increase the supply of fuel in the country.
YESTERYEAR: An oil tanker discharges petroleum products at a fuel depot in the commercial city of Lagos, Nigeria.
When do we stop petroleum products importation? “Many states presently can not pay their workers for over six months, while local government councils have not paid their staff for over 12 months”.
The removal of subsidy will liberalize the downstream sector, opening it up to more interested players.
Bring an end to the incessant fuel scarcity through the availability of more than sufficient amounts of PMS, arising from the increase in imports and importers.
However, it would not be inappropriate to expect that even if global crude oil prices are rising, the expected upward push in domestic fuel prices will be cushioned by a stronger valued naira vis-à-vis the dollar (the crude oil value denominator), since the additional dollar revenue which automatically accrue to us from rising crude oil prices would also increase our foreign exchange reserves positively, and this should be reflected in a stronger naira exchange rate; Thus, ultimately, domestic fuel prices will either stabilize or even fall in response to a stronger naira. Potential investors can now invest knowing that they can sell their product at a more realistic price, thereby recovering cost and generating profit. So it is clear that the single most important factor in the determination of local fuel prices, is actually the naira exchange rate.
Reduced pressure on foreign exchange reserves. Yet, because past governments were not for and of the people, the true meaning and objective of the subsidy policy became lost. Exiting its role as a major importer frees up more foreign exchange that can be channelled to more tangible projects. He also said the decision to increase the price of petrol “is illegal and contemptuous” because a Federal High Court had declared it to be contrary to the Price Control Act and the Petroleum Act. This greatly reduces the foreign exchange earnings of the government because the swaps deplete the amount of crude meant for sale.
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In a effort to address the looming fuel shortages, the Nigerian National Petroleum Corporation (NNPC) has begun talks with at least three global firms to swap more of its crude for gasoline, according to traders and oil executives. We urge the Federal Government to immediately unroll the promised palliative measures and we also urge it to seriously address labour’s demand for a new minimum wage. According to BuzzDigital it is estimated to create 200,000 jobs and prevent the loss of already existing jobs.
