Mixed reactions greet slash in petrol price

…Why Buhari approved reduction in price of PMS – Sylva

Mixed reactions on Wednesday trailed the reduction in the pump price of Premium Motor Spirit from N145 to N125 per litre by the Federal Government.

While some Nigerians lauded the reduction, petroleum marketers, however, faulted the government for not engaging stakeholders before announcing the new price regime.

Recall that following a drop in crude oil prices as a result of Coronavirus (COVID-19) global pandemic, President Muhammadu Buhari approved the reduction in pump price of premium motor spirit (PMS), from N145 per litre to N125 litre.

The reduction as communicated by the Nigerian National Petroleum Corporation (NNPC), will translate to N125/litre retail pump price.

President Buhari, who gave the approval on Wednesday in Abuja, equally directed the Nigerian National Petroleum Corporation (NNPC) to reduce the Ex-Coastal and Ex-Depot prices of PMS to reflect current market realities.

In a statement made available to newsmen in Abuja, Minister of State for Petroleum Resources, Timipre Sylva, disclosed that the Petroleum Products Pricing Regulatory Agency (PPPRA) would subsequently issue a monthly guide to the NNPC and Marketers on the appropriate pricing regime.

According to him, the reduction in pump price could help have a salutary effect on the economy, provide relief to Nigerians and also provide a framework for sustainable supply of PMS in to the country.

His words: “The drop in crude oil prices has lowered the expected open market price of imported petrol below the official pump price of N145 per litre.

“Therefore, Mr. President has approved that Nigerians should benefit from the reduction in the price of PMS which is a direct effect of the crash in global crude oil prices.

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“In view of this situation, based on the price modulation template approved in 2015, the Federal Government is directing the Nigerian National Petroleum Corporation (NNPC) to reduce the Ex-Coastal and Ex-Depot prices of PMS to reflect current market realities.

“Also, the Petroleum Products Pricing Regulatory Agency (PPPRA) shall subsequently issue a monthly guide to NNPC and Marketers on the appropriate pricing regime.

“The Agency is further directed to modulate pricing in accordance with prevailing market dynamics and respond appropriately to any further oil market development.

“It is believed that this measure will have a salutary effect on the economy, provide relief to Nigerians and will provide a framework for sustainable supply of PMS to our country.”

Sylva further noted that “the Ministry of Petroleum Resources will continue to encourage the use of Compressed Natural Gas to complement PMS utilisation as transport fuel.”

National Chairman of All Progressives Congress (APC), Comrade Adams Oshiomhole, in his reaction, commended President Muhammadu Buhari for approving a reduction in the pump price of Premium Motor Spirit (PMS) also known as petrol from N145 to N125 per litre.

In a statement issued on Wednesday in Abuja, Chief Press Secretary to Comrade Oshiomhole, Comrade Simon Ebegbulem, quoted him to have described the president’s decision as “a product of a progressive mind driving the machinery of a responsive, responsible and compassionate government.”

The statement reads: “On behalf of the National Working Committee of our great party, the APC, I commend our dear President, Muhammadu Buhari, GCFR, on his decision, which received the approval of the Federal Executive Council (FEC), to reduce the pump price of petrol from N145 to N125 per litre.

“This clearly shows how progressive-minded the APC administration under President Muhammadu Buhari’s leadership is.

“It is also indicative of how compassionate the administration is in the desire and effort to align with the current global economic realities foisted on us by the fall in crude oil prices.

“Without a doubt, it is also, very largely, a measure of the administration’s responsiveness to the need for accountability in public finance management and openness in governance.

“It is instructive that since there is a crash in global crude oil prices, the APC-led Federal Government ensured that it did not toe the path of some previous administrations by not responding to the obvious direct effects of the crash.

“It is, therefore, to the eternal credit of the APC-led Federal Government on the watch of President Muhammadu Buhari that this unprecedented decision had been taken to ensure that Nigerians benefit from the reduction in the price of Premium Motor Spirit.

“We doff our hat to all members of the President’s team in the FEC for thinking this decision through and quickly announcing it to palliate the burden that the crash would have had on Nigerians if this decision had not been taken to reduce fuel pump price to N125 per litre.”

Reacting, a financial expert, Prof. Uche Uwaleke, said that the reduction in the price of fuel would complement the stimulus package announced by the Central Bank of Nigeria (CBN) to reduce the effect of COVID-19.

Uwaleke, of Nasarawa State University, Keffi, told the News Agency of Nigeria (NAN) in Lagos that the reduction in the pump price of Premium Motor Spirit (PMS) from N145 to N125 per litre would reactivate economic activities.

“It complements the stimulus packages just announced by the CBN.

“The immediate impact is a reduction in transport costs and possibly food inflation,” Uwaleke said.

The professor, who commended government for the reduction, said that if properly implemented, it would lower inflation rate, which stood at 12.20 per cent in February.

He said that lower inflation rate would translate to improved purchasing power and lower cost of living.

According to him, movement of goods and people will lead to increased economic activities, thereby translating to higher Gross Domestic Product.

Executive Director, Socio-Economic Rights and Accountability Project (SERAP), Mr. Adetokunbo Mumuni, stated that the reduction would bring temporary relief to Nigerians who had been facing myriads of economic challenges.

Mumuni said: “SERAP welcomes the reduction in the price of fuel but we think more can still be done to lessen the pains of our people.

“We all know what Nigerians are facing today due to the harsh situation of the country and we believe government needs to do more to bring succour to the people.”

An oil and gas expert, Mr. Wilson Opuwei, said the government should be commended for the reduction having successfully subsidised fuel when prices were high at the international market.

Opuwei, who is the Chief Executive Officer of Dateline Energy Services Limited, however, said that the government ought to have carried the marketers along before arriving at the decision.

“This kind of reduction comes as a shock to marketers who have already ordered for products but hopefully the government will pay the differentials.

”Also, the marketers should adjust their prices because this is a patriotic decision taken in the overall interest of Nigerians,” he said.

However, a top marketer who spoke on condition of anonymity, said the government was not being fair to marketers.

“They have failed to pay marketers subsidy and then this unilateral reduction of price without consultation is not acceptable.

”What happens to all the stock that has been sold to marketers at a higher price? Will government pay the cash difference now? Government should be engaging marketers to plan for deregulation and not to set arbitrary prices,” he said.