Lai: New pump price inevitable

Lai Mohammed, minister of information and culture, says the new pump price of petrol is inevitable, explaining that the federal government took the decision to end “the crippling fuel scarcity”.

He said the former price of N86.50 gave an estimate subsidy claim of N13.7 per litre, which translated to N16.4 billion monthly that the government could not afford.

Mohammed also explained that the new price regime was not the removal of subsidy, saying there is no provision for subsidy in the 2016 budget.

He was speaking on Friday at the maiden conference of the Advertisers Association of Nigeria (ADVAN), which held in Lagos.

“The liberalisation of petrol supply and distribution will allow marketers and any Nigerian entity willing to supply PMS to source for their Forex and import PMS to ensure availability of products in all locations of the country,” he said.

“The unavailability of foreign exchange and the inability to open letter of credit have forced marketers to stop product importation and imposed over 90 per cent supply on the NNPC since October 2015.

“This is in contrast to the past where NNPC supplies 48 per cent of the national requirement.

“The truth is that the NNPC does not have the resources for, nor is it designed to meet this increase in supply. The result is the crippling fuel situation across the country.

“Pushed to supply 90 per cent of the products required for domestic consumption, the NNPC has continued to utilise crude oil volumes outside the 445,000 barrel per day allocated to it.

“This has created major funding and remittance gaps into the federation account.”

Mohammed also disclosed that Petroleum Products Pricing Regulatory Agency (PPPRA) and the Department of Petroleum Resources (DPR) would be empowered to ensure a strict compliance with market rules and consumer protection.