Read Press Statement On Fuel Subsidy Removal In Nigeria, By Kachikwu

The meeting reviewed:

1. The current fuel scarcity and supply difficulties in the country.

2.
The exorbitant prices being paid by Nigerians for the product. These
prices range on the average from N150 to N250 per litre currently.

3.
The meeting also noted that the main reason for the current problem is
the inability of importers of petroleum products to source foreign
exchange at the official rate due to the massive decline of foreign
exchange earnings of the federal government. As a result, private
marketers have been unable to meet their approximate 50% portion of
total national supply of PMS.

Following a detailed presentation
by the Honorable Minister of State for Petroleum Resources, it has now
become obvious that the only option and course of action now open to the
government is to take the following decisions:

1. In order to
increase and stabilise the supply of the product, any Nigerian entity is
now free to import the product, subject to existing quality
specifications and other guidelines issued by Regulatory Agencies.

2.
All Oil Marketers will be allowed to import PMS on the basis of FOREX
procured from secondary sources and accordingly PPPRA template will
reflect this in the pricing of the product.

Pursuant to this,
PPPRA has informed me that it will be announcing a new price band
effective today, 11th May, 2016 and that the new price for PMS will not
be above N145 per litre.

We expect that this new policy will
lead to improved supply and competition and eventually drive down pump
prices, as we have experienced with diesel. In addition, this will also
lead to increased product availability and encourage investments in
refineries and other parts of the downstream sector. It will also
prevent diversion of petroleum products and set a stable environment for
the downstream sector in Nigeria.

We share the pains of
Nigerians but, as we have constantly said, the inherited difficulties of
the past and the challenges of the current times imply that we must
take difficult decisions on these sorts of critical national issues.
Along with this decision, the federal government has in the 2016 budget
made an unprecedented social protection provision to cushion the current
challenges.

We believe in the long term, that improved supply and competition will drive down prices.

The
DPR and PPPRA have been mandated to ensure strict regulatory compliance
including dealing decisively with anyone involved in hoarding petroleum
products.

Thank you.
SIGNED