Fuel price to revert to N97 as FG plans gradual removal of fuel subsidy in 2016

The Federal government has indicated plans to gradually remove fuel subsidy by 2016. This was made known by the Minister of State for Petroleum, Ibe Kachikwu while appearing before the Joint National Assembly Committee on Finance, Appropriation and National Planning yesterday Dec. 14.

During his interaction with the senators, Kachukwu, stated that the subsidy regime which was at over N1 trillion in 2015 was no longer be sustainable.

He said the plan was to gradually remove the subsidy by first reverting to the old pump price of N97 per litre

“The government doesn't need to fund subsidy. There is energy around the removal of subsidy. Most Nigerians we talk to today would say, that's where to go. I have since left the dictionary of subsidy by going to price modulation, which is a bit more technical. Price of refined products today is N87. It was N97 before it was removed and we really have to go back to that because we don't really have the finance to remove it. There are lots of safety barometer between the N87 and N97 per litre regime between which government does not have to fund subsidy. Yet the prices would be fairly close to what it used to be today. That is the first mechanism we are going to work on. It is when that mechanism fails that we will begin to look at a total subsidy exit. We believe we could achieve that."

he said