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FG gives reasons for fixing price on PMS

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 Secretary to Government of the Federation, Babachir David Lawal

Secretary to Government of the Federation, Babachir David Lawal

The Federal Government has given reasons for putting a ceiling price for Prime Motor Spirit (PMS) commonly called petrol, saying the decision is sincere and made in good faith, even as it placed the present woes at the doorsteps of previous administrations.

A statement issued yesterday in Abuja, signed by the Secretary to the Government of the Federation (SGF) Babachir Lawal said various political and economic considerations that pre-dates the present administration compelled government to boldly take the decision to be the regulator, up the price and partially deregulate the sector, with the hope of a downward adjustment as local refineries resume production.

Tracing back to the time the country returned to democratic government in 1999 to now, where successive government failed to look at the identified challenge and invest in local refining of products as a panacea for the seemingly unending challenge, the statement said the situation exacerbated because of the cost of crude oil, the operational condition of the refineries and much later, the costs associated with the importation of petroleum products.

“All of these reasons however, can be attributed to one single factor which is simply our inability to produce locally the products that we consume,” it said, adding that “Nigerians have been subjected to severe hardship as a result of scarcity of petroleum products,” hence the need to peg the price, partially deregulate and encourage competition, but the prices can be lowered at some point, when the local refineries begin production.

He explained: “This scarcity has lingered for this long because government has largely been the sole importer of petroleum products. The private importers have refused to do business at this time because they truly cannot sell at the prevailing government-controlled price and make profit especially, because of the inability of government to sell foreign exchange to these importers at the official rate.

“In the circumstance, government is left with no option but to partially deregulate the sector and assume the role of a regulator. The ceiling of N145.00 per litre is the highest in the band approved for the cost of PMS (petrol). The implication is that the price can be lower. Indeed, for government-imported products, it is lower. We also have assurances that prices of products will come down as the production from our refineries become more regular and stable and also as a result of the competitiveness and efficiencies that this deregulation policy will enthrone. This decision that this administration has made is sincere and in good faith.”

The statement said the Minister of State for Petroleum Resources, Ibe Kachukwu “will present to Nigerians the details of the challenges of the petroleum sector inherited by this administration and the measures that are being put in place to surmount these challenges, including the courageous decision to deregulate the sector.

“Meanwhile, government will continue to dialogue with the labour unions to address their grievances and for all of us, stakeholders to agree on the measures to adopt to reinvent our country,” the statement said.


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