FG Moves to Force Fuel Price Cuts as Crude Oil Falls

Taiwo Oyedele, minister of finance and coordinating minister of the economy, says the federal government is engaging oil marketers and regulators to ensure reductions in global crude oil market prices are reflected more transparently in the pump price of fuel. Oyedele said the government is seeking a balance between protecting consumers and allowing operators in the downstream sector to remain commercially viable. The minister spoke to journalists on the intervention after the federal executive council (FEC) meeting, presided over by President Bola Tinubu on Monday. He said marketers are often quick to raise pump prices when crude oil prices increase because of replacement costs, but slower to reduce prices when crude prices fall due to existing inventory. “We are working to strike a balance between ensuring operators remain commercially viable and protecting Nigerians from unfair pricing,” Oyedele said. Oyedele’s comments on the issue come a day after the Federal Competition and Consumer Protection Commission (FCCPC) accused oil marketers of failing to pass on the benefits of falling global crude oil prices to consumers, saying recent reductions in pump prices were not commensurate with the sharp decline in crude prices. Oyedele said the FCCPC and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) are already addressing the issue under the Petroleum Industry Act (PIA). He said the Tinubu administration has also taken steps to moderate domestic fuel prices by suspending value-added tax (VAT), excise duty and the surcharge on petroleum products. The minister said petrol prices in neighbouring countries are between 20 and 50 percent higher because those taxes remain in place. The chairman also urged transport operators benefiting from the presidential compressed natural gas (CNG) initiative to pass the savings from cheaper fuel to commuters instead of charging fares comparable to petrol-powered vehicles. “Government had made significant investments in the CNG programme and I call on all stakeholders to play their part in ensuring Nigerians benefit from the intervention,” he said. According to the chairman, the FEC also approved financing arrangements worth about $2.96 billion, €200 million and N215 billion to support projects in transportation, agriculture, power, infrastructure and micro, small and medium enterprises (MSMEs). The approvals include N215 billion for the presidential CNG initiative, $900 million for agriculture, $160 million for rural solar projects in Niger state, $1.2 billion for section two of the Sokoto-Badagry super highway, and €200 million alongside $500 million to expand access to credit for MSMEs through the Development Bank of Nigeria (DBN).

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