NIGERIAN GOVERNMENT FINALLY SCRAPS FUEL SUBSIDY

The Federal Government of Nigeria has finally scrapped the fuel subsidy programme she had sustained for years amidst monumental fraud by importers, banks, Navy, Customs officials as well every actor in the different stages of the importation of fuel into the country.

Recall that attempts had been made in the past notably in 2012 to scrap the programme. According to Ibe Kachikwu, Group Managing Director of the state owned Nigeria National Petroleum Corporation and Minister of State for Finance, "the government could no longer afford the payment due to the dip in its revenue caused by the drop in crude oil prices"

Dr. Kachikwu hinted that the new price regime would be somewhere around the thresholds of N87. This position mirrors that made by President Muhammadu Buhari when he presented the nation's 2016 budget proposal before a joint session of the National Assembly. He said: "I have directed the Petroleum Products Pricing Regulatory Agency (PPPRA) to adjust its pricing template to reflect competitive and market driven components that would keep the price of petrol selling at N87 per litre for now.”

One can only wonder what the current government hopes to do differently to mitigate against a possible rise in fuel pump price, a likely fallout of the subsidy removal. Could it be achieved by what Kachikwu termed "pricing modulation"?:  “It (new pricing regime) 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 on it yesterday is that the price will be far below N87,” he said.
“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 to fluctuate this market to reflect what the reality of crude market is.

We shall watch unfolding events in the coming days particularly the reaction of the leadership of the Nigeria Labour Congress who relying on the experience of 2012 have vowed to kick against any planned removal of petroleum subsidy.