The federal government has announced the removal of subsidy on petroleum motor spirit (PMS), saying the pump price of petrol may trade at N145.
This is coming less than 24 hours after Ibe Kachikwu, minister of state for petroleum resources, announced that a new subsidy policy will soon be unveiled.
The development was attributed to the current fuel scarcity and supply difficulties in the country.
“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,” Kachikwu said in a statement issued at the end of a meeting presided over by Vice-President Yemi Osinbajo in Abuja on Wednesday.
“Along with this decision, the federal government has in the 2016 budget made an unprecedented social protection provision to cushion the current challenges.
“The Petroleum Products Pricing Regulatory Agency (PPPRA) 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 believe in the long term, that improved supply and competition will drive down prices.”