Petrol Price Increment Not As A Result Of Subsidy Removal -FG

The federal government has come out to clarify reasons behind the new price increase of petrol in the country as being as a result of foreign exchange issues currently in short fall and inability of Major and independent marketers to source for foreign exchange in banks to import petrol into the country as nigeria presently import mostly all local fuel consumption.

Vice President Prof Yemi Osinbajo made this known over the weekend via his twitter handle @ProfOsinbajo. He pointed out that the Nigeria National Petroleum Corporation NNPC currently source for 50% of local fuel consumption while major and independent oil marketers are responsible for the remaining 50% of local fuel consumption a feat that was partly responsible for the lingering fuel scarcity nationwide.

He equally said at $40 a barrel there is no much of a subsidy to remove if there is any and consequently noted that President Muhammadu Buhari is the most convinced pro-subsidy advocate. He reiterated that before now marketers source for foreign exchange from Central Bank of Nigeria CBN up until three months ago, but recently due to relative scarcity of foreign exchange and the dwindling federation account and short term depletion of the account as a result of fall in the crude oil prices at the international market the CBN simply does not have enough fx to give out As a result importation of petrol by major and independent marketers has contributed little or nothing to the local consumption and supply of petrol since late last year.

According to Professor Osinbajo the federal government is left with no option but to allow independent marketers and any Nigeria entity to source for their own foreign exchange at autonomous market and import fuel. He said the federal government expects that the marketers will source for foreign exchange of about N285 to a dollar at interbank rate and would be restricted to sell between N135 and N145 per litre. The Vice president believes with competition more private refineries and NNPC refineries working at full capacity, prices will drop considerably.

On plans by the federal government to ensure prices come down in due course, the Vice president said by 4 quarter of 2018 about 70% of local fuel consumption will be produced and refined locally, he maintained that at full capacity all the refineries in Nigeria cannot produce more than 40% of local consumption required in the country. He said more private refineries will be encouraged and the NNPC will work towards making all their refineries work at full capacity to ensure petrol are refines locally by 2018.