The Federal Government has revealed the reduction of fuel price from N87 to N85 per litre, while announcing that fuel subsidy has been scrapped.
The change in price as revealed by the Minister of State for Petroleum, Dr. Emmanuel Ibe Kachikwu, will take effect from January 1, 2016. He revealed this in the Port Hacourt Refinery Company (PHRC), where he spent Christmas inspecting the plant.
In his words, “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.”
Kachikwu said, the new price is below the current N87 per litre and it would now convince Nigerians that the pricing modulation that the Federal Government promised to embark on a few days ago was not a gimmick.
He noted that following government’s analysis and research, it has been realized 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 subsidize the product following the fraud that has attended its operation.
“We can’t even understand where those subsidies were going to. There is a lot of fraud elements in it so we need to cut that of.
“The second is the earning capacity of the Federal Government. It is deteriorating by the day with lower prices of crude.”
He concluded that from the application of market realities for the pricing modulation, government has discovered that petrol would sell for either N85 or N86 per litre.
The minister recalled that it was from this axiom that President Muhammadu Buhari announced that the price of petrol remains N87 at the moment.
