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Ibe Kachikwu Minister speaks on fuel price increase [VIDEO]

Minister of State for Petroleum Resources, Dr Ibe Kachikwu made the announcement after a meeting with industry stakeholders in Abuja.

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Nigeria's Oil Minister and OPEC president Emmanuel Ibe Kachikwu addresses a news conference after a meeting of OPEC oil ministers in Vienna, Austria, December 4, 2015. play Nigeria's Oil Minister and OPEC president Emmanuel Ibe Kachikwu addresses a news conference after a meeting of OPEC oil ministers in Vienna, Austria, December 4, 2015. (REUTERS/Heinz-Peter Bader)

Minister of State for Petroleum Resources, Dr Ibe Kachikwu, on Wednesday, May 11, 2016, announced the removal of fuel subsidies in Nigeria.

Kachikwu made the announcement after a meeting with industry stakeholders in Abuja.

“We have just finished a meeting of various stakeholders presided over by His Excellency, the Vice-President of the Federal Republic of Nigeria. The meeting had in attendance the leadership of the Senate, House of Representatives, the governors’ forum, and labour unions (NLC, TUC, NUPENG and PENGASSAN),” he said according to ThisDay.

“Following a detailed presentation by the Honourable Minister of State for Petroleum Resources, it has now become obvious that the only option and course of action now open to the government is to take the following decisions:

“In order to increase and stabilise the supply of the product, any Nigerian entity is now free to import the product, subject to existing quality specifications and other guidelines issued by the regulatory agencies.

“All oil marketers will be allowed to import petrol on the basis of forex procured from secondary sources and accordingly, the PPPRA (Petroleum Products Pricing Regulatory Agency) template will reflect this in the pricing of the product.

“Pursuant to this, PPPRA has informed me that it will be announcing a new price band effective today, 11th May, 2016 and that the new price for petrol 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… 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.

“Along with this decision, the federal government has in the 2016 budget made an unprecedented social protection provision to cushion the current challenges.

“We believe in the long term, that improved supply and competition will drive down prices. The DPR and PPPRA have been mandated to ensure strict regulatory compliance including dealing decisively with anyone involved in hoarding petroleum products," he added.

The subsidy removal will also lead to petrol being sold for as much as N145 per litre.

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