Pump Price May Go Up In April 2016–FG

Minister for State of Petroleum Resources, Ibe Kachikwu, has assured Nigerians that the planned removal of oil subsidy next year may not affect the pump price of Premium Motor Spirit, PMS, commonly called petrol.

Kachikwu made this known while speaking on Thursday in Abuja.

According to the minister, “My focus is that, the federal government shouldn’t spend as much as it is spending on subsidy,” adding that the NNPC is now taking an intellectual means of tackling the matter, without affecting the poor.

He further said “it’s no longer about taking a number, yank it off, take off subsidy and we go. What we are doing is reviewing the PPPRA template, how can we reduce some of the cost elements? How do we deal with foreign exchange so there’s some stability in terms of the exchange rate?”

Kachikwu explained that, “If we could close the amount of product that are smuggled out of the country, the effective consumption of the country cannot be more than 35 or 36 million (litres per day).

“If we take this analysis, we can deliver products today with the price of oil where it is and also sell close to the prices we have today without the need of the federal government to pay subsidy.

“It is not that we have removed subsidy but the application of market forces will enable you to sell products as close to the prices we have today.”

However, the minister noted that Nigerians may have to pay more to get the product in April 2016.

“Is it going to be between N87 and N90? we will have to get PPPRA to do those templates and at 35 million (litres) we may sell products at N87; by the time we consume 36, we may be selling at N90 or N91”.

“Today the prices are largely close to N87; there might be no need to change the price by January, and it might go up or come down slightly by April.

“It is all the dynamics of what the crude is; so, I have not put a static figure, myself and PPPRA will sit down and do the calculations and be able to announce what price PMS will sell in January,” he stressed.