18th January, 2015
The Federal Government has announced the reduction of the fuel price of petrol from N97 per litre to N87 per litre.
The Minister of Petroleum Resources, Diezani Alison-Madueke, said this at a press conference that the new price regime would take effect immediately.
Madueke said the N10 reduction in fuel price was necessitated by the reduction in crude oil prices in the international market.
“As you may be aware, there has been a lot of volatility in the oil market in the past few months and due to this the importation prices of our petroleum products have been impacted.”
“Therefore, with the approval and directive of President Goodluck Jonathan and by virtue of Section 6 clause 1 of the Nigerian Petroleum Act, it is my responsibility as Minister of Petroleum Resources to hereby announce a reduction in the pump price of Petroleum Motor Spirit (Petrol) from the current Ninety Seven Naira (=N=97) per litre pump price down to Eighty Seven Naira (=N87=) per litre pump price, effective from twelve (12) midnight Sunday, 18th of January 2015.
“Accordingly, I have directed the Petroleum Products Pricing Regulatory Agency (PPPRA) and the Department of Petroleum Resources (DPR) to ensure strict compliance of this price adjustment by all marketing companies. It is my hope that all Nigerians will benefit from this adjustment,” Madueke said.
Analysts said Mrs. Alison Madueke’s announcement has come about three months late, since crude oil prices began its downward slide.
On Monday in Asia, US benchmark West Texas Intermediate (WTI) for delivery in February eased 37 cents to $48.32 in afternoon trade and Brent crude for March fell 37 cents to $49.80.
Oil prices have lost more than half their value since June, when they sat at more than $100 a barrel.
Mrs Diezani Alison-Madueke also failed to address the very obnoxiously high price of diesel, another bye product of crude oil, which has not been reduced since the massive reduction in crude oil prices.
Many countries have since adjusted the pump prices of refined oil products, including diesel.
Nigeria made the belated move days after the Trade Union Congress called for some action.
According to TUC a cut in pump prices of fuel and diesel would reduce the effect of the devaluation of naira which was triggered by the slump in global oil prices and oil revenues — on businesses and manufacturing companies.
“ Federal government has refused to reduce the prices of petroleum products even though the price of crude has collapsed in the international market, which was the reason given when it wanted to increase the price of fuel in 2012,” the TUC said — referring to when the government fixed the current fuel price of N97 ($0.58)/litre.
One estimate, citing PPPRA template, said petrol should not sell for more than N80 in Nigeria.