The Federal Government of Nigeria has again rejected the Nigeria Governors’ Forum’s proposal for an increase in the price of petrol.
Three months ago, the forum recommended an increase in the price of Premium Motor Spirit (Petrol) to between N380 and N408.5 per litre and removing fuel subsidy, which the Federal Government turned down on May 21.
However, the Federal Government again on Friday insisted that no decision on the adjustment of petrol pump price would be reached until after negotiations with labour have been concluded.
The governors’ proposal was based on the report of its committee headed by Mallam Nasir El-Rufai, the Kaduna State Governor.
According to El-Rufai, the current subsidy regime was unsustainable because smugglers and illegal markets in neighbouring African countries were the beneficiaries.
Chief Timipre Sylva, Minister of State for Petroleum Resources, while reacting, said the current price would be retained until negotiations with the organised labour were concluded.
The minister said, “Once again, it has become necessary to assure Nigerians that despite the huge burden of under-recovery, the Federal Government is not in a hurry to increase the price of Premium Motor Spirit (petrol) to reflect current market realities.
“The current price of petrol will be retained in the month of June until the ongoing engagement with organised labour is concluded.
“This clarification becomes necessary in the light of recent reports regarding the resolution of the Nigeria Governors’ Forum to increase the pump price of petrol.”
Dr Billy Gillis-Harry, the president, Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), on Friday, said that the oil marketers’ position that fuel subsidy should be stopped, remains.
“When it (fuel subsidy) is stopped, the prices of petroleum products will be determined by market forces and this will create competition and lead to an increase in product availability,” he argued.
He asked the Federal Government to accept the governors’ proposal, especially now that the country is having funding challenges.