Nigeria: FG Cuts Fuel Price
Posted by travelhouseuk on January 23, 2009
Abuja — On a day the Federal Government reiterated that the nation’s economic outlook remains buoyant, Petroleum Products Pricing Regulatory Agency (PPPRA) has asked oil marketers to reduce the price of a litre of Premium Motor Spirit (PMS), otherwise known as petrol, to N65. This represents a N5 reduction.In a statement signed on behalf of the agency by Yusuf Mu’azu, PPPRA said last night that the decision followed the downward trend in the prices of crude and refined petroleum products at the international market.
The development, PPPRA said, “has brought the open market pump price of Premium Motor Spirit (PMS) below the current price of N70.00k.”
The agency said, in line with its statutory mandate, it had decided to substitute the fixed price with a recommended price in order to pass on the benefit of this drop in price to the Nigerian public.
“In this regard, it is recommended that all petroleum marketers take a cue on the open market reference price level for petrol – the average for the one-month period specified – from the PPPRA’s posted price on its website or as published in the national dailies.
“All petroleum marketers are enjoined to comply with this price immediately. The PPPRA, using its automatic price adjustment mechanism, shall be posting on its website as well as announcing and publishing in the media the indicative price of petrol on monthly basis.
“The PPPRA will continue to liaise with the Department of Petroleum Resources (DPR) to ensure that petroleum marketers do not engage in profiteering by selling above the upper limit of the open market price monitored by the Agency,” the statement said.
THISDAY had last month quoted the Special Adviser to the President on Petroleum, Dr. Emmanuel Egbogah, as saying the prices of petroleum products would be reduced by not less 25 per cent, but the Group General Manager (Public Affairs) of the Nigeria National Petroleum Corporation (NNPC), Dr. Levi Ajuonuma, had denied the story, saying no such decision had been taken.
Egbogah had also said the reduction would gradually move from 25 per cent to 40 per cent to reflect the spate of the current fall in global prices of oil.
But Ajuonumah said Egboga was quoted out of context, maintaining that “since the Federal Government has subsidised the pump price heavily recently, the government is not in a hurry to tinker with the current domestic pump price. The subsidy has always been very heavy on the government, costing at times N500 million in one month. Any way the government can recover a little bit of the subsidy cost in view of the global market price of the crude, will be welcome.”
Meanwhile, the Federal Government said yesterday that despite the global economic crisis, which continued to deepen and takes its toll on many countries of the world, the nation’s economic outlook remained favourable.
Declaring open the Third Annual Microfinance and Microfinance/ Entrepreneurship Awards in Abuja, Vice-President Goodluck Jonathan said the economic growth was on track buoyed by the strong performance in the non-oil sector.
Jonathan, who represented President Umaru Musa Yar’Adua, pointed to the fact the GDP growth rate grew from 6.2 per cent in 2007 to 8 per cent at the end of 2008.
“It is pleasure to know that Nigeria’s economic output remains favourable even in the face of the current economic global financial crisis. Our economic growth is on track, oiled by the strong performance of the non-oil sector. The provisional estimates of the Nigerian GDP growth rate for the end of 2008 is as impressive as 8 per cent compared to 6.2 per cent in 2007. We are looking up to what the figures will be in 2009,” he said.
However, the statistics reeled by Jonathan and his statement seem to contradict the realities on ground. For instance, prices of oil at the international market have maintained a downward streak since after the third quarter of last year, free falling from a high of $147 per barrel to somewhere below $40 per barrel at the end of last year.
Even while Jonathan churned out the favourable statistics and made encouraging statement, the negative effect of the economic crisis was not totally lost on him, as he told the gathering at the conference that everybody was aware of the global economic crisis and its effect on countries.
He assured that the Yar’A-dua-led administration was preparing to mitigate any likely negative effect of the crisis on the nation’s economy.
According to him, “we are all aware of the realities of the global economic crisis which is affecting many countries in the world. This administration has taken several bold and pragmatic steps to shield the economy from the negative effects of this global melt down. We have also set up the presidential steering committee on the global economic crisis made up of experienced professionals, who are expected to give greater efforts to the efforts to cushion the impact to the global economic recession.”
