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Minister of petroleum says govt hands off fuel price fixing

By on September 3, 2020 0 141 Views

Nigeria’s minister of state for petroleum Timipre Sylva on Thursday responded to the various outcry over the hike in the pump prices of petrol, saying the government is “no longer in the business of fixing” fuel prices.

The minister said the global oil price crash had made removing the subsidies “inevitable”, Sylva told an online briefing.

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“It is about the survival of our country, the economic survival,” he said. “There are certain things that the country can ill-afford at this time,” Sylva said.
Sylva said prices would now fluctuate freely with international markets, and the ministry would become an “umpire” rather than a price-setter.

“Our duty now is to ensure the public is not cheated,” he said.

On Wednesday, the Pipelines and Product Marketing Company (PPMC) announced a new ex-depot petrol price of N151.56 per litre, which would put pump prices above the previous record of N145 a litre.

Across the country on Thursday, many fuel stations are selling the commodity at between N159 to N162 per liter following the announcement by the PPMC of me ex-depot price.

Sylva said private importers could now compete with PPMC and sell fuel at other prices. However, if PPMC sets its price below market, state oil company NNPC could in effect remain the primary supplier; price caps had previously made it unprofitable to import fuel, and NNPC had been importing more than 90% of Nigeria’s gasoline.

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Sylva added that the government is also launching initiatives to convert cars to run on liquefied natural gas (LNG), liquefied petroleum gas (LPG) and compressed natural gas (CNG) that will give Nigerians alternative fuel choices.

He added that the nation was producing 1.412 million barrels per day (bpd) of crude oil. Its output has been closely watched for compliance with an OPEC-led supply cut agreement.

Nigeria has been spending around N1 trillion annually to subsidize domestic consumption of fuel, however, in March the government announced a new pricing mechanism that it said would maintain its control, but allow prices to move with the market and eliminate subsidies.

-With Reuters Report

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