The Federal Government may reduce the pump price of petrol to N85 per litre from January 1, 2016.

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, made this disclosure to journalists at the Port Harcourt Refining Company, Rivers State, after inspecting the plant.

Asked when the Federal Government would release the new petrol price template prepared by the Petroleum Product Pricing Regulation Agency, Kachikwu said that he approved the new price for the agency on Thursday.

Pressed to reveal when the new price would become effective, Kachikwu, said “like I said, we have done a modulation and it is showing us below N87. I imagine that if PPPRA publishes it today, it will become effective immediately. But the 1st of January 2016 is when we are looking at.”

He said the new price would be below the current N87 per litre and it would now convince Nigerians that the pricing modulation that the Federal Government promised to embark on a few days ago was not a trick.

He said, “It (the template) is out, I signed off on it yesterday (Thursday). I imagined that in the next couple of days the marketers would get advice on that. The nice thing about the PPPRA, where I signed up on it yesterday is that the price will be far below N87. So for the first time people will understand that the pricing modulation I was talking about is not a gimmick. It is for real.

“We have gone to find out how we will be able fluctuate this market to reflect what the reality of crude market is. The objective is that one, we cannot afford to continue to subsidise. We can’t even understand where those subsidies were going to. There are a lot of fraud elements in it so we need to cut that of.”

He stated that from the applicable market realities for the pricing modulation, government discovered that petrol would sell for either N85 or N86 per litre.

Kachikwu said, “But in applying that where we landed when we did the analysis for the very first time was about N85 or N86, so it is below N87. And maybe the first price that will come will reflect it. That was why Mr. President said that the price will be N87 for now. And that is what we have in mind.” 

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