Sunday 1 January 2012

Breaking News: Nigeria Government Unleashed Pains On Citizens On New Year’s Day

Mr President where is thy mercy?
Just a minute after the  12 midnight when 2011 ushered in it successor 2012, the citizens of the country regarded as one of highest oil producing countries in the world (Nigeria) were all filled with joy and happiness to witness the new year hoping for better future. While on the other side of this country her government was planning the unleashing of the pain for the celebration of the New Year, the removal of the oil subsidy. The celebration of the new year was cut short as the proposed removal of oil subsidy actually kicked off on this very beginning day of the year and all corners of the country, especially Lagos State where we have the highest consumption of oil, were threw into anguish by the removal of the subsidy.

Below is a full text of press release from PPPRA on oil subsidy
Following extensive consultation with stakeholders across the nation, the Petroleum Products Pricing Regulatory Agency (PPPRA) wishes to inform all stakeholders of the commencement of formal removal of subsidy on Premium Motor Spirit (PMS), in accordance with the powers conferred on the agency by the law establishing it, in compliance with Section 7 of PPPRA Act, 2004.

By this announcement, the downstream sub-sector of the petroleum industry is hereby deregulated for PMS. Service providers in the sector are now to procure products and sell same in accordance with the indicative benchmark price to be published fortnightly and posted on the PPPRA website.

Petroleum products marketers are to note that no one will be paid subsidy on PMS discharges after 1st January 2012.

Consumers are assured of adequate supply of quality products at prices that are competitive and non-exploitative and so there is no need for anyone to engage in panic buying or product hoarding.
The PPPRA in conjunction with the Department of Petroleum Resources (DPR) will ensure that consumers are not taken advantage of in any form or in any way.

The DPR will ensure that the interest of the consumer in terms of quality of products is guaranteed at all times and in line with international best practice.

In the coming weeks, the PPPRA will engage stakeholders in further consultation to ensure the continuation of this exercise in a hitch-free manner.
With the removal, a litre of petrol could be sold for about N141 or more as against the N65 it was sold until early today. While at the point of this publication there were long queues in various filling stations in Lagos as sellers were still skeptical about the final or agreed price for this product. The filling stations that were open are selling at the least price of N141 irrespective of the yet to be announced agreed price.
If going by all estimations, the Government will save about N1.3 trillion per annum from this removal of subsidy. While the below are some of the benefits to accrue from this removal:
  • Availability of additional investments in the power sector, roads, water, transportation and downstream exploration.
  • The part of saving from this subsidy will also be shared among the three tiers of government.
  • Reduction in the level of government borrowing for future or on going projects
  • Availability of funds for health, employment and public works schemes and other related social projects.

The questions are:
  • To what extent will this unbearable hardship be bearable?
  • Are there other well functioning social infrastructures that will cushion the adverse effect of this removal before the arrival of it envisage advantages?
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