Buhari Removes Oil Subsidy

President Muhammadu Buhari has announced an end to the subsidy of Premium Motor Spirit (PMS). He has declared that the price of the product will now be N85 from its present price of N87 per litre. It will take effect from January 1, 2016. Making this known at the Port Harcourt Refinery Company, the Minister of State for Petroleum, Ibe Kachikwu said, “Like I said, we have done a modulation calculation and it is showing us below N87. “I imagine that if PPPRA publishes it today, it will become effective immediately. But the 1st of January that is when we are looking at. “The new price is below the current N87 per litre and it would now convince Nigerians that the pricing modulation that the Federal Government promised to embark on a few days ago was not a gimmick.” Kachikwu, who also doubles as the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC) explained that consequent upon government’s analysis and research, it was discovered that Nigeria can fluctuate the fuel market in accordance with the crude oil market fundamentals. Kachikwu also maintained that The FG could not afford to subsidize the product as a result of the fraud which surrounded its operation. The Minister of State (Petroleum) who further noted that it is clear that government earnings are dipping on daily basis added that, “It is out. I signed off on it yesterday (Thursday). “I imagined that in the next couple of days the marketers would get advice on that. The nice thing about the PPPRA, where I signed up for it yesterday is that the price will be far below N87. “So for the first time, people will understand that the pricing modulation I was talking about is not a gimmick. It is for real. We have gone to find out how we will be able fluctuate this market to reflect what the reality of crude market is. The objective is that one, we cannot afford to continue to subsidize. “We can’t even understand where those subsidies were going to. There are a lot of fraud elements in it so we need to cut that off. “The second is the earning capacity of the Federal Government is deteriorating by the day with lower prices of crude and come out more.”