Federal Government Will Not Remove Fuel Subsidy, Says Kachikwu...See Details

 

The Minister of State for Petroleum, Dr. Emmanuel Ibe Kachikwu yesterday said  the Federal Government will not scrap the Petroleum Support Fund (also known as subsidy) but will, instead, embark on price modulation, The Nation reports.

The minister denied saying  the price of petrol will go up in January.

While addressing a press conference in Abuja, Kachikwu said the Nigerian National Petroleum Corporation (NNPC) will alongside the Petroleum Product Pricing Regulatory Agency (PPPRA) sit to determine the new template to arrive at a new price which will be subject to quarterly review in line with the price of crude oil.

He explained that government is planning to use N87 and N97 as a ceiling for the price modulation at every given time instead of fixing the fuel price without basis.
 

Kachikwu said: “I did not say that refine product will sell N97 next year. That is not what I said. I said between a bound of N87 and N97. We are going to look at the prices.

“Today the price is close to N87 so there might be no need to change prices. By January, it may well go up slightly. By February it may well go up slightly. But by March it may well go up slightly; by April, it may come down.

“So it is all a dynamic of what the price of crude is. So I have not put a static figure; myself and PPPRA will sit down to do the calculation to be able to announce what the PMS will sell for in January.  We do not anticipate any major shift in the cost of crude today.”

The minister who lamented that the Federal Government spent  an unbearable over N1 trillion on fuel subsidy this year said NNPC has to take measures to whittle some of the cost elements of the subsidy template.

He said government will now look at how to reduce its allocation to the Petroleum Equalisation Fund (PEF) and foreign exchange.