Taiwo Oyedele, Minister of Finance, says the federal
government is negotiating a price ceiling of N1,350 per litre on the ex-gantry
or landing cost of petrol.
Oyedele, speaking on Thursday at a news conference on petrol
subsidy in Abuja, said the plan aims to stabilise pump prices.
He said the federal government will also introduce “price
modulation”, noting that pump prices “should not have to follow every swing in
global crude or the exchange rate”.
“The government is negotiating a ceiling of 1,350 naira a
litre on the ex-gantry or landing cost of petrol, to keep pump prices stable,”
he said.
“Where costs rise above the ceiling, refiners and importers
will carry the shortfall and recover it later, when crude prices or the
exchange rate allow, without breaching the ceiling.
“This is neither a subsidy nor a price control: it is
designed to smooth prices over time rather than suppressing them. The reasoning
is simple. 1,400 naira a litre today and 1,400 tomorrow is better than 1,500
today and 1,300 tomorrow, because volatility itself adds to uncertainty and
cost.”
Oyedele said when fares go up sharply, they rarely come down
as fast.
“The ceiling will be reviewed every month, reset where costs
require, and the figures published for transparency,” he added.
To protect households and businesses from future energy
shocks, the minister said the federal government is investing in a national
strategic fuel reserve.
“Refined products will be released into the market under
clear, published rules whenever a global disruption or hoarding threatens
supply and price stability,” he said.
“This is not a subsidy and it does not fix prices, rather it
secures supply and reduces price volatility,” Oyedele said.
“It will prevent artificial scarcity, deter market
manipulation and anchor long-term energy security, so that a deregulated market
delivers stable growth and not sudden price shocks.”
Oyedele said the federal government is scaling up the
deployment of compressed natural gas (CNG) together with the states to ensure a
faster rollout.
He said transporters are encouraged “to pass the savings on
to passengers in lower fares”.
The minister said the federal government will also consider
an “excess profit tax” for operators who take undue advantage of consumers,
anywhere along the energy value chain.
“The proceeds will be used exclusively to cushion the impact
of fuel prices, through transport support or vouchers for urban minimum wage
earners who are the most vulnerable,” he said.
The minister added that “we will also work with the National
Assembly to consider enhanced tax relief for low-income earners under the 2027
Finance Bill”.
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