The federal government has reduced the pump price of Premium Motor Spirit (PMS), otherwise called petrol, from N168 per liter (or N170 per liter at certain gas stations) to N162.44 per liter, effective from December 14, 2020.
Minister of Labour and Employment, Chris Ngige, disclosed the new price regime to labour leaders during a meeting which began at 9pm on Monday and ended at 1:30am on Tuesday, December 8.
Petrol is now mostly dispensed at N168 per liter, after the Petroleum Products Marketing Company (PPMC), a subsidiary of the state-owned Nigerian National Petroleum Corporation (NNPC) increased the ex-depot price of petrol from N147.67 per litre to N155.17 per litre in November.
The ex-depot price is the price at which the product is sold by the PPMC to marketers at the depots.
The price of petrol went from N138/liter to N151/liter in September and then to N161/liter afterwards.
End of subsidy era
The Buhari-led federal government has repeatedly announced that it has fully deregulated the petroleum downstream sector, which means that the price of the product at the pumps will be determined by market forces and the international market.
However, analysts are wondering why the federal government continues to fix pump prices in a deregulated sector.
President Muhammadu Buhari has reiterated that his administration can no longer afford to pay for petrol subsidies because government revenues have dipped by more than 60 percent, no thanks to the novel coronavirus pandemic.
“There is no provision for fuel subsidy in the revised 2020 budget, simply because we are not able to afford it, if reasonable provisions must be made for health, education and other social services. We simply cannot sustain petroleum subsidy,” the president said in September.