The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Malam Mele Kyari, on Monday in Abuja said that with the reduction of the pump price of petroleum prices (petrol from N145 to N123.50), the era of subsidy on the price of petroleum products is gone forever.
Malam Mele Kyari, said in Abuja that “there is no subsidy…It is zero forever.”
Responding to a question on whether the government is still paying subsidy on petrol, he said: “What I mean is going forward, there will be no resort to either subsidy or over recovery of any nature. NNPC will play in the marketplace. It will just be another marketer in the space.”
The last major attempt to remove fuel subsidy was in January 2012. But the then leading opposition politicians who are now in Nigeria’s ruling party mobilized the citizens who confronted the administration of President Goodluck Jonathan.
The violent protest which held mainly in Lagos under the aegis of “Occupy Nigeria,” locked down the nation and paralysed all the nation’s political, social, religious and economic activities.
President Jonathan then caved under pressure and returned the regime of fuel subsidy, which subsists till today.
Since then, subsequent heads of the NNPC have each canvassed the removal of fuel subsidy whereby the federal government pays money in order to reduce the cost of refining petroleum products, especially petrol towards stabilizing the pump price of the products.
This keeps the prices of petroleum products in Nigeria’s domestic market low.
When President Muhammadu Buhari was sworn in 2015, he raised the pump price from N97 to N145. Surprisingly, his allies in the Organized Labour and Civil Society Organisaitons (CSOs) never opposed the increase. In the past few weeks, the price of crude has slumped in the international market, sometimes to $22 per barrel, resulting in the Buhari administration for the first time reducing domestic pump price from N145 to N125. Last week, it was reduced further to N123.50.