By pegging the price of Premium Motor Spirit (PMS) at N145 a litre, the Federal Government has in the last two months saved about N139 billion from subsidy removal.
Before the introduction of the current pricing template of the Petroleum Product Pricing Regulatory Agency (PPPRA), a litre of petrol was selling at N86.50, estimates showed that the government would have been subsidizing the product with about N58 per litre.
The country currently consumes about 40 million litres of PMS daily, which would have amounted to N69.6 billion in one month.
t a regulated price of N86.50, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu had said that government was paying about N16.4 billion monthly as subsidy.
Kachikwu said that the there was no provision for subsidy in 2016 appropriation, therefore the need to remove fuel subsidy.
According to him, the Federal Government spent N1 trillion in subsidizing petrol in 2015 alone.
Listing the benefits of the new pricing template, Kachikwu said that the new framework solve fuel scarcity crisis by ensuring availability of products at all locations of the country.
He added that the new fuel-pricing regime would also ensure market stability and improve fuel supply situation through private sector participation.
He believed that it would reduce hoarding, smuggling and diversion substantially and stabilize price at the actual product price.
It is also expected to create labour market stability, which will potentially created additional 200,000 jobs through new investments and prevent potential loss of nearly 400,000 jobs in existing investment.
The new system is expected to provide government more revenue to address social and infrastructural needs in the country
The new system is expected to provide government more revenue to address social and infrastructural needs in the country
No comments:
Post a Comment