IMF Advice: Queues Creep Back to Fuel Stations, FG considers N250 per Liter

Uche Mbah

Following the advice of the International Monetary Fund, IMF, that Nigeria should go the whole hog and remove the subsidy on downstream oil products, government is said to be geared towards a phased increase in pump price of Premium Motor Spirit, PMS. Hours after the announcement by the IMF boss, there appeared long queues at the filling stations.

The IMF had advised Federal Government to remove subsidy on Premium Motor Spirits, PMS, for enhancement of economic recovery.

Speaking in Washington, the IMF boss, Christiana Lagarde, insisted that subsidy removal is necessary for critical infrastructure to be dealt with.

“Nigeria has among the lowest Tax to GDP ratio which signifies low revenue mobilisation for the government and the only way to fill in the gap is to remove subsidy.” she said. “We believe that removal of fossil fuel subsidies is the right way to go. If you look at our numbers since 2015, it is no less than 5.2 trillion dollar that is spent on fuel subsidies and the consequences thereof. Our Fiscal Affairs Department actually identified how much would have been saved fiscally, but also in terms of human life if there has been the right price on carbon emission as of 2015. The numbers are quite staggering. There will be more fund available for public spending to build more hospitals, roads, schools, and to support education and health for the people,” she said.

Hours after the advice by the International Financial institution, Fuel queues have resurfaced at Nigeria filling stations, with Marketers giving the usual reasons for fuel scarcity. Many stations were closed down because some marketers are waiting to know the direction the wind of change will blow. This was fueled by speculations that the federal government is poised to raise the pump price of fuel to N250 per liter-a speculation that the Federal Government has denied.

Although Filling stations have not generally increased their pump price in Lagos,reports indicate that in some states in the east it has jumped to about N160 per liter.

This is coming at a time there has been increased clamor for probity and accountability in the Nigerian National Petroleum Corporation, NNPC. Recently, Maikanti Baru, the NNPC boss, said that the NNPC’s operational and financial results for September 2018 portrays the country as consuming 80 million litres of petrol per day in March 2018. This was up from the 41 million litres daily  consumption in December 2017. Many analysts questioned the authenticity of this figure, since it appears that the NNPC may never be audited.

The Federal Government has always played Ping Pong with the Petroleum Subsidy. Each time they claim to remove it, the still fix prices, thereby revealing the political implications of such removals.

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