We will still remove petrol subsidy – Jonathan

Nigeria’s president says fuel subsidy will be removed.

Nigerians must brace up for tougher times ahead as the Federal Government is determined to remove the controversial subsidy on petrol, President Goodluck Jonathan announced on Tuesday.

The president did not give a specific timing for the subsidy removal but at the 2013 Nigeria Summit which held on Tuesday in Lagos, he said his administration without a doubt, will stop subsidizing petrol for Nigerians.

This means Nigerians, who largely depend on fuel to generate electricity and power their cars, will begin to purchase fuel for as high as N146.59.

A similar move to remove the petrol subsidy on the first day of January 2012 led to massive resistance by most Nigerians and culminated in a protest that grounded the nation’s economy for a week.

The president had announced the hike in petrol price of N65 to N141 per litre.

But the nationwide strike succeeded in compelling government to cut down the price of petrol to the current price, N97 per litre. Still, the expenditure on subsidy to marketers of petroleum products has continued to climb from a budget of N256 billion in 2011 to more than N2 trillion last year.

At the summit titled “Enabling and Implementing Change”, which was organized by The Economist, a financial magazine, Mr. Jonathan said while wide consultation would be carried out before fuel subsidy is removed, it would surely be removed.

“We cannot continue to waste resources meant for a greater number of Nigerians to subsidise the affluent middle class, who are the main beneficiaries (of fuel subsidy). We believe that as we progress, government is going to continue to enlighten Nigerians on the need to remove fuel subsidy,” the president said.

The Petroleum Products Pricing Regulatory Agency, PPPRA’s, pricing template as at December 31, 2012, shows the landing cost for a ton of Premium Motor Spirit, PMS, or petrol at about $1,106.55, or N131.10 per litre.

When the distribution margins of N15.49, consisting retailers (N4.60); transporters (N2.99); dealers (N1.75); bridging fund (N5.85); marine transport average charge (15k) and administration charge (15k), are added to N131.10, the total cost of a litre of petrol may be as high as N146.59 with the planned removal of subsidy by government.


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  • Mpitikwelu_na_Ugwu_Awusa

    The main beneficiaries of the subsidy are marketers like Abdulsalami Abubakar, owner of Maizube oil. With proper checks, petrol prices will be lower than what marketers are charging. So many of the thieves has been charged to court. The war against subsidy thieves is a war for all us. If we make it Jonathan’s war, the marketers win. Premium Times should apply common sense in its hate campaign against Jonathan.

    • Enemona

      These same marketers are in bed with the NNPC in ruining us all. The so-called subsidy removal is not being done with sincerity. Until we see a purposeful leadership and a corrupt-free NNPC and petroleum ministry with sincerity of purpose to reform the oil sector, we will continue to resist this devilish plan.

    • FreeKick

      So did PTimes ask Jonathan to draw 2011 campaign funding from subsidy and pension?Never forget it’s no hidden fact Maina is his ally…

  • Ndidi

    I am beginning to better understand this petrol subsidy issue and agree that it should be removed. Many of us have paid much more than the 97 Naira per litre that petrol was supposed to cost anyway. I don’t believe that the promised buses and mass transport vehicles will ever properly materialize to help the poor. Civil society groups have got solutions for what to do after subsidy removal but will our PDP government listen?

    • Enemona

      Yes, but when it’s removed, whatever you pay for fuel will rise too.

    • FreeKick

      Don’t fool yourself with Ndidi, we know you are one of the Mpitikwelu hydrids..

    • Dan maikoko

      Dr. Ezielen Agbon a Nigerian who works for decades in the petroleum sector and now works in texas made a presentation during the debate on subsidy removal. according to him at less than N50/liter with all the senselessness of fuel importation, the govt will be making a profit on fuel sold at Sokoto. He showed that fuel will be even cheaper if its refined here in Nigeria. The real dishonesty and wickedness of Nigerian govt officials such the president is the fact that they dont even pretend that they are working to see that we refine our own fuel to save cost. Govt cant run a company they say, yet every company of repute in China is state owned. Little Venezuela has 8 state owned refinery and export cheap refined fuel to the U.S. Brazil too has state owned refineries.
      I have said time without number that in an economy like ours only a dullard will raise fuel prices. Once fuel goes up everything else goes up with it. That is another way of saying that the value of the Naira goes down. Since we buy fuel with international currency, the domestic price has to go up again ad infinitum. The naira was 147 to the dollar when the fuel price was raised in january last year, its now 160. Its a vicious cycle that we have been running round since the days of IBB.

      • Lanre

        Thank you Maikoko. I blame Obasanjo for the emergence of Jonathan. Obasanjo cannot stand intelligent people. Or rather people that can challenge him. I have no hope in Jonathan. There are two things that a Nigerian leader needs to do now. 1). Return Nigeria to the regions in a quasi-confederal structure a la 1963 with the addition of two more Middle Belt and South-South. 2). Give the regions control over all revenue from resources derived from within the regions. If Jonathan cannot do this, he will fail and not only fail, his inexperience in governance and leadership will plunge Nigeria into a crisis of unimaginable proportions.

  • awelle

    I tink dis president of ours shld look in2 security 1st b4 embarkin on any oda thg!!!!

  • babansa

    Yes, of course, Mr. President. The USA is now angry with you because you pardoned theves and convicts like Alams and Shettima. The US will definitely be happy with you as soon as you remove fuel subsidy. Please think of the poor Nigerians who are dying daily due to poverty. This is more important for you than pleasing some super powers.

  • igbiki

    I doubt we have any but if we do, it should’t be removed whatsoever.

    In Europe and the US they have health insurance and functioning educational system.

    They enjoy 24/7 power, water, social services and health insurance.

    Nigerians enjoy 24/7 terrorists bombings and shootings, bad roads, avoidable deaths, armed robbery, kidnappings, police harrasments, political gangsterism and assasinations, unfathomable corruption at the highest realms, presidential dilly-dallying and protections for undesirable, corrupt and criminal elements.