Editor’s note: The government of President Muhammadu Buhari has on May 11,officially stopped the subsidy regime on premium motor spirit. The price of petrol may now start from N145 per litre. Emmanuel O. in this piece first published on Nigerian Bulletin lists three benefits of fuel price increase.
The federal government of Nigeria, in a bid to deregulate the downstream oil sector has announced an imminent change in the pump price of petrol.
According to Minister of State for Petroleum Resources, Ibe Kachikwu, the new price for PMS will not be above N145 per litre.
Here are three possible positive outcomes of the fuel price increment:
Yes, we’ve all been there. You’ve been on the queue at the station for hours and when it’s your turn to buy, the fuel attendance says “fuel don finish.” The best thing to do at that moment is to hold someone’s hands and hymn Kumbaya.
However, with the new rules put in place, those pesky fuel queues may totally be a thing of the past. Part of the decision FG made before approving a new fuel price was to open the importation doors to more businessmen. According to Kachikwu, “any Nigerian entity is now free to import the product, subject to existing quality specifications and other guidelines issued by regulatory agencies.”
As a result, the market is expected to be flooded with the product. This will automatically make fuel queues disappear. Heck, maybe we won’t be needing fuel attendants at petrol stations again.
Don’t curse me yet.
Remember when MTN came to the Nigeria and started selling a SIM card for N50k? What happened after Airtel came? Glo? Etisalat? It’s the same everywhere, competition always benefits the customers. MTN and co now hawk SIM cards on the streets and rates are also falling and becoming competitive.
We can expect the same in the fuel market. A strong competition between oil marketers will surely drive down the price of the commodity.
According to Kachikwu, the new decision will encourage investments in refineries and other parts of the downstream sector.
He added that it will also prevent the diversion of petroleum products and set a stable environment for the downstream sector in Nigeria.
This article expresses the authors’ opinion only. The views and opinions expressed here do not necessarily represent those of GLtrends.com or its editors.
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