WAHALA: FG Recommends Fuel Increase To N302 Per Litre
The Nigerian government may increase the price of Premium Motor Spirit (PMS), otherwise known as petrol, to N302 per Litre in February 2022 as part of the recommendations of the National Economic Council (NEC)
This is part of the government’s plan to completely deregulate the PMS prices, eliminating monthly subsidy payments with provisions to ensure fair competition in the market,
The recommendations were suggested by the NEC ad-hoc committee interfacing with the Nigerian National Petroleum Corporation (NNPC) on the appropriate pricing of PMS in Nigeria. The Governor of Kaduna state and head of the committee, Nasir El-Rufai presented the report.
Other members of the committee include Godwin Obaseki, Kayode Fayemi, and David Umahi, governors of Edo, Ekiti and Ebonyi states respectively; as well as Godwin Emefiele, governor of the Central Bank of Nigeria (CBN); and Mele Kyari, group managing director of the Nigerian National Petroleum Corporation (NNPC); Zainab Ahmed, minister of finance, budget and national planning
In May 2021, the Nigeria Governors’ Forum (NGF) had also recommended N385 per litre — but stakeholders, including Nigerian government, rejected the recommendation.
The recommendation has since been reconsidered and dropped by the committee.
According to the new report, the committee recommended full deregulation of PMS prices by February 2022 — raising the price by about N130/140 per litre.
It also recommended that all retailers should post PMS prices at all times on a designated website and smartphone app — and they are expected to post price changes no earlier than within 15 minutes of the price change.
With the recommendations, the committee added that the Nigerian government would save N250billion per month on petrol subsidy removal.
“At current rates, the PMS subsidy is reducing transfers into the federation by about N250billion per month, and could, if PMS subsidies are not eliminated, result in deductions of NGN 3 trillion in 2022,” the committee’s resolution reads in part.
“The large-scale time-limited (6-months) cash transfer proposed as a way of transferring the subsidy “directly to the people” would cost N600 billion but would by paving the way for the elimination of PMS subsidies, enable the federation to recover N3 trillion in revenues that would otherwise go to PMS subsidies.
