President Muhammadu Buhari has approved the reduction in pump price of premium motor spirit (PMS), better known as petrol, from N145 per litre to N125, with immediate effect.
There will also be yet undisclosed reduction in pump prices of kerosene and diesel, according to the President’s approval.
Minister of State for Petroleum Resources, Timipre Sylva, announced this after the Federal Executive Council (FEC) today, explaining that this was in line with global drop in crude oil price.
The sharp fall in price is occasioned by the spread of Covid-19, and saw crude oil price slumping from $60 to $30, causing fear of a possible global economic crisis.
Government would henceforth allow the international price of crude to determine the price of petrol in Nigeria, said Sylva in a statement he made available to State House correspondents.
The statement reads: “The drop in crude oil prices has lowered the expected open market price of imported petrol below the official pump price of N145 per liter.
“Therefore, Mr. President has approved that Nigerians should benefit from the reduction in the price of PMS which is a direct effect of the crash in global crude oil prices.
“In view of this situation, based on the price modulation template approved in 2015, the Federal Government is directing the Nigerian National Petroleum Corporation (NNPC), to reduce the Ex-Coastal and Ex-Depot prices of PMS to reflect current market realities.
“Also, the PPPRA shall subsequently issue a monthly guide to NNPC and marketers on the appropriate pricing regime.
“The agency is further directed to modulate pricing in accordance with prevailing market dynamics and respond appropriately to any further oil market development.
“It is believed that this measure will have a salutary effect on the economy, provide relief to Nigerians and would provide a framework for a sustainable supply of PMS to our country.
“The Ministry of Petroleum Resources will continue to encourage the use of compressed natural gas to complement PMS utilization as transport fuel.”