The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has assured Nigerians that the removal of fuel subsidy would crash the price of petrol from the new price of N145 per litre to an unimaginable price over the next six months.
Speaking on Thursday, May 12, on Channels TV’s programme, Sunrise Daily, Kachikwu said that the subsidy removal became necessary in roder to end the fuel scarcity in the country.
According to him, the market dynamics would drive down the price of petrol in the long run “because there are a lot of Nigerians who are very active, very bullish, very talented in doing this; they just have been prevented by government intrusions.
“As it gets better and it gets to a point where we find that the market has stabilised in terms of supply, we will begin to pull back a bit in terms of determinants for pricing.
“You will be amazed at what will happen to your N145 price because it will go downwards,”he said.
On part of why the drastic decision had to be made, the minister said that the government could not provide foreign exchange for the importation of fuel as a result of decline in government earnings from oil.
“You don’t give what you don’t have. We want Nigerians to understand that we feel the pain, and we have tried to avoid it since I came in October. We have done everything we can.
“We first went on to the issue of the subsidies that we inherited which, by the way, were based on 50 to 55 million litres consumption, and we said the number looked bloated. So, we did an experiment and came to a conclusion that this country doesn’t consume more than 45 million litres a day.
“Then we came to a second point and said, ‘We are not even going to have subsidy again. We are going to exit it because there was just too much fraud involved in it,” he said.
He said if government did not make the decision, fuel queues across the nation would continue as there was no foreign exchange for importation.
He added: “So, left with that option, what were we supposed to do? We have struggled. Queues continue to go and they are back. And it will continue to happen unless we address the issues.
“If you free up Nigerians to find sources of funds, they will find those secondary funds. They will import the product; the burden on the NNPC will reduce and the country will have peace and subsidy will go away permanently.
“I am appealing to Nigerians to please for the first time realise that we are doing our very best. I have together with everybody who is in this government worked night and day looking for solutions.
“We mean well and Nigerians should please trust us. Give us a chance, you will be surprised what will become of your PMS price over the next six to eight months.”
The Federal Government had on Wednesday, May 11, announced the removal of fuel subsidy, with a new petrol price of N135 to N145 per litre, up from N86 and N86.50.