This comes after months of speculation and a town hall meeting featuring speeches by the Minister of Petroleum Resources, Diezani Alison-Madueke and other stakeholders.
The removal of the subsidy is effective immediately.
What this means is that price of petrol in Nigeria will rise by over 100%. This aspects almost every facet of Nigerian life as transportation prices are likely to rise and cost of doing business as well. Given the poor power management infrastructure and erratic electricity supply situation in Nigeria, businesses which rely on petrol generators are likely to increase their prices to manage costs.
Below is the official statement.
PPPRA Announces Formal Removal of Subsidy on Premium Motor Spirit (PMS)
Following extensive consultation with stakeholders across the nation, the 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.
In the coming weeks, the PPPRA will engage stakeholders in further consultation to ensure the continuation of this exercise in a hitch-free manner.
Executive Secretary, PPPRA
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