The Federal Government today announced the scrapping of oil subsidy and a reduction of the pump price of the Premium Motor Spirit (PMS) to N85 per litre from January 1, 2016. Minister of State for Petroleum, Dr. Emmanuel Ibe Kachikwu, broke the news to journalists in the Port Harcourt Refinery Company (PHRC), where he spent Christmas inspecting the plant.
Asked when would the Federal Government release the new price temperate of the Petroleum Product Pricing Regulation Agency (PPPRA), he said that he approved the new price for the agency on Thursday.
“Like I said, 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 new price is below the current N87 per litre, saying that it would now convince Nigerians that the pricing modulation that the Federal Government promised to embark on a few days ago was not a trick. He further noted that following government’s analysis and research, it has been realised that the country can fluctuate the fuel market in accordance with the crude oil market fundamentals.
Justifying government’s reasons for scrapping the Petroleum Support Fund otherwise known as oil subsidy, Kachikwu explained that government can no longer afford to subsidise the product following the fraud that has attended its operation. He added that it has become clear that government earnings are dipping on daily basis.