The Minister of Information and Culture, Alhaji Lai Mohammed, says the new price regime for petrol announced by the Federal Government is inevitable if the nation is to end the crippling fuel scarcity.
The minister stated this on Friday in Lagos at the maiden conference of the Advertisers Association of Nigeria (ADVAN), themed “The ADVAN Marketers Conference”.
He said the decision was taken to ensure availability of the products and end the suffering of Nigerians who queue for long hours to get it.
Mohammed noted that with the drastic fall in the price of crude oil, there had been a drastic reduction in the amount of foreign exchange available.
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.”
The minister also explained that the new price regime was not the removal of subsidy, adding there is no provision for subsidy in the 2016 Appropriation.
According to him, the erstwhile petrol price of N86.50 gave an estimate subsidy claim of N13.7 per litre, which translated to N16.4 billion monthly which government could not afford.
The minister added that the renewed insurgency and pipeline vandalism in the Niger Delta had reduced national crude oil production to 1.65 million barrels per day, against 2.2 million barrels per day planned in the 2016 budget.
He said the reduction had lower the income to federation account, affected crude volumes for PMS conversion and impacted on government’s foreign exchange earnings.
He said the resultant fuel scarcity had created an abnormal increase in price, resulting in Nigerians paying between N150 and N300 per litre.
He stressed that the prevalent hoarding, smuggling and diversion of products had also reduced volumes made available to citizens.
In his words, “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.”
Mohammed disclosed that under the new price regime, the PPPRA and DPR would be further empowered to ensure a level playing ground and strict compliance with market rules by all stakeholders and consumer protection.
On the benefits of the new price regime, the minister said it would solve the recurrent fuel scarcity by ensuring product availability across the country.
Besides, he said it would reduce hoarding, smuggling and diversion of products substantially and stabilise price.
The minister added that the new price regime would ensure market stability and improve fuel supply situation through private sector participation.
He added that it would create labour market stability, additional 200,000 jobs through new investments in refineries and prevent potential loss of 400,000 jobs in existing investments.
The minister sought the understanding and cooperation of the citizens and the various organisations in the efforts to end the cycle of fuel scarcity.
Mohammed congratulated the officials and members of AVAN on the occasion designed for sharing ideas and developing the procession.
Earlier in a welcome address, the President of ADVAN, Mr David Okeme, said the association, an umbrella body of brand owners and advertisers, was formed 22 years ago.
He said the essence of the conference was for members to share information and to review the activities of the association. – The News.
