Federal Government announces immediate removal of petrol subsidy

President Goodluck Jonathan.

The Petroleum Products Pricing Regulatory Agency (PPPRA) has announced the immediate take off of the deregulation policy in the downstream sector of the country’s petroleum industry.

The agency’s Executive Secretary, Reginald Stanley, said the commencement of the policy effective today was preceded by the formal removal of subsidy on premium motor spirit (PMS), otherwise known as petrol.

The PPPRA scribe said the introduction of the policy follows the conclusion of extensive consultation by the Federal Government with various stakeholders nationwide, particularly the Nigerian Labour Congress (NLC), which has remained vocal in its opposition to the policy by the organised private sector.

Mr. Stanley said in a statement today in Abuja: ”Petroleum Products Pricing Regulatory Agency (PPPRA) wishes to inform all stakeholders of the commencement of formal removal of subsidy on Premium Motor Spirit (PMS), in accordance with the powers conferred on the agency by the law establishing it, in compliance with Section 7 of PPPRA Act, 2004.

”By this announcement, the downstream sub-sector of the petroleum industry is hereby deregulated for PMS. Service providers in the sector are now to procure products and sell same in accordance with the indicative benchmark price to be published forthnightly and posted on the PPPRA website.

”Petroleum products marketers are to note that no one will be paid subsidy on PMS discharges after 1st January 2012.

“Consumers are assured of adequate supply of quality products at prices that are competitive and non-exploitative and so there is no need for anyone to engage in panic buying or product hoarding.

“The PPPRA in conjunction with the Department of Petroleum Resources (DPR) will ensure that consumers are not taken advantage of in any form or in any way.

“The DPR will ensure that the interest of the consumer in terms of quality of products is guaranteed at all times and in line with international best practice

” Though the PPPRA executive secretary did not say whether it has also given marketers permission to adjust their service pump meters till they have exhausted their current stock of petrol, he however said it planned to engage stakeholders in the industry in the coming weeks to further consult on modalities to ensure a hitch-free implementation of the policy.

The introduction of the policy is seen by many as a repulsive New Year Day gift to Nigerians, signaling the beginning of heady days ahead, as the NLC, which has warned repeatedly of plans to call out workers on a nationwide strike action to protest the policy should government go ahead with it despite its opposition.

The NLC had reiterated its position at a recent townhall meeting organised by the Newspaper Proprietors Association of Nigeria (NPAN) in Lagos. It said though workers were not entirely against the deregulation policy in the downstream sector of the industry, government should take steps to redress some fundamental issues necessary to make it yield the desired benefit to the people.

Part of the demands of the NLC has to do with the removal of practices that promote corruption in the products distribution chain as well as the provision of facilities, such as refineries and products storage depot and pipeline distribution networks, to ensure that the deregulation policy is not import-dependent, but on the country’s local refining capacity.

It is expected that the NLC will meet later today to take a stand on when the nationwide protest would commence.

Full transcript of the PPPRA statement announcing withdrawal of petrol subsidy.

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