Uncertainty remains over subsidy amid reduced fuel price

Following the reduction in the pump price of petrol, after a review of the pricing template showed that subsidy was absent, an industry expert has indicated that it still remains uncertain what the Federal Government intends to do about subsidy, The Punch reports.

Although the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, had stressed the need to do away with fuel subsidy, no official announcement has been made on its removal despite the new petrol pump price of N86.5 per litre, as against the old pump price of N87. The Executive Secretary, PPPRA, Mr. Farouk Ahmed, also remained vague and stated that the revised template would be reviewed on quarterly basis to ensure that petroleum product prices reflect current realities.

The Head of Energy Research, Ecobank Capital, Mr. Dolapo Oni said; “We are waiting to see an upward revision in fuel prices if oil price increases. If that happens, then we will know that they have taken out subsidy. But if they don’t announce a higher price, then it means subsidy is still ongoing.”

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