President Muhammadu Buhari on Wednesday approved the reduction of the pump price of the Premium Motor Spirit (PMS) also known as petrol.
“Mr President has approved that Nigerians should approve from the reduction in the price of PMS which is a direct effect of the crash in global crude oil prices,” Nigeria’s state for petroleum resources minister Timipre Sylva said in a statement.
“The drop in crude oil prices has lowered the expected open market price of imported petrol below the official pump price of N145 per litre.”
The Nigerian National Petroleum Corporation said in another statement that the new retail price for PM will no be N125.
“A Price Modulation Mechanism is being introduced, to be managed by the Petroleum Products Pricing Regulatory Agency (PPPRA), to henceforth adjust the price in line with the market price of crude oil,” NNPC said.
Sylva last week said the government was in consultation with relevant stakeholders on the possibility of reducing the price following the crash in crude oil prices in the international market.
The crash was occasioned by the coronavirus pandemic, which has left over 8000 persons dead and more than 200, 000 infected.
Sylva said Buhari directed the Nigerian National Petroleum Corporation (NNPC) to reduce the Ex-Coastal and Ex-Depot prices of PMS to reflect current market realities based on the price modulation template approved in 2015.
The minister said the Petroleum Products Pricing Regulatory Agency (PPPRA) shall subsequently issue a monthly guide to NNPC and Marketers on the appropriate pricing regime.
Sylva noted that NNPC has been directed to modulate pricing in accordance with prevailing market dynamics and respond appropriately to any further oil market development.
“It is believed that this measure will have a salutary effect on the economy, provide relief to Nigerians and will provide a framework for sustainable supply of PMS to our country,” Sylva said.
He said the petroleum resources ministry will continue to encourage the use of Compressed Natural Gas to complement PMS utilization.
