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Minister of Petroleum Resources, Diezani
Alison-Madueke
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Despite the recent reduction in the
pump price of petrol from N97 to N87 per litre, the Federal Government has said
it will still pay subsidy on the product for the next 40 days.
The government explained that fuel
consumed in Nigeria was “heavily subsidized” before the global crunch in crude
oil prices, adding that it would take some time before subsidy on the product
would stop.
The Punch reports the Minister of Petroleum Resources,
Mrs. Diezani Alison-Madueke, while explaining why the pump price of fuel in
Nigeria did not reduce as soon as global crude oil prices plummeted, said
Nigeria was importing against the global import prices for crude.
She spoke during a Raypower radio
programme monitored by our correspondent in Abuja.
Speaking also on the price of
diesel, the minister said the product’s price was been decided by market forces
as diesel was not regulated by the Federal Government.
“Bear in mind that we will still be
covering subsidy cost for at least 40 days for those marketers who had already
brought in stock, there should be no issue with distributing the product at the
lower price,” the minister said.
The Punch reported on Thursday that
despite the recent reduction in the pump price of petrol, the government
claimed it still pays N2.84 as subsidy on every litre of the product consumed.
Also, the Petroleum Product Pricing
Regulatory Agency, in a statement on Friday, insisted that with the current
pump price of N87/litre, the government was still subsidizing the pump price of
petrol in favour of consumers.
The PPPRA Executive Secretary, Mr.
Farouk Ahmed, said the price of crude oil dropped to a point where the open
market price of petrol also fell to a level where the government considered it
appropriate to relieve some of the burden imposed on Nigerians by the knock-on
effect of the dwindling price of crude oil on the economy.
He said the price of crude oil
averaged US$62 in December, 2014 and dropped to an average of US$50 per barrel for
the first half of January, 2015.
According to Ahmed, it is after a
consistent monitoring of the trend that the government was able to confirm its
ability to reduce the pump price of gasoline, commensurate with the amount
announced.
He explained that even at the lowest
crude oil price of US$47.23 recorded on January 16, 2015, the open market price
of petrol was about the same as the erstwhile price of N97/litre.
“What this means is that at the new
price of N87 per litre, government is still subsidizing the pump price of
petrol,” Ahmed was quoted in the statement.
On why the price of diesel did not
respond to the global crash in crude oil prices considering the fact that the
product was not subsidized, Alison-Madueke said diesel was not controlled by
the government.
She said, “Therefore you will find
that diesel’s response is directly related to the market indices of supply and
demand in a free market. It relates directly to whatever cost it is being
procured abroad, that is the global prices. So we have no business with that.”
On kerosene and why it was difficult
to get the product at the subsidized rate of N50/litre, she said the
transportation cost to remote areas coupled with the greed of some marketers
were the major reasons why kerosene price was high in many locations.
Alison-Madueke said, “There are
unscrupulous marketers everywhere who just put more on top of their products
than the actual transportation cost. We have come down hard on them so many
times and have sealed some of them. But as you do one, another one comes behind
and that is why I appeal to marketers because it is greed and avaricious
behaviour that causes this.”
Meanwhile, the government officially commenced
its Kero-Correct Scheme on Friday in Abuja. The scheme, according to the Group
Managing Director, Nigerian National Petroleum Corporation, Dr. Joseph Dawha,
would ensure the sale of kerosene at the regulated price of N50/litre in
filling stations across the country.
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