The general manager of the Nigeria National Petroleum Corporation, NNPC, Garba Deen, says increase in petroleum pump price is happening globally and not just in Nigeria. According to him, top oil producing country, United Arab Emirates, has removed its transportation fuel subsidy and plans to deregulate its oil sector with effect from August 1st.
He also said Saudi Arabia is planning to increase its petrol pump price. Deen said this while speaking to newsmen in Abuja yesterday May 16th.
“For instance, the United Arab Emirates, the third-biggest oil producer in OPEC, has become the first country in the oil-rich Persian Gulf to remove transport fuel subsidies. In addition, the country has announced that with effect from August 1, 2016, fuel prices will be deregulated. Also, in response to fiscal pressure caused by the fall in crude oil prices, OPEC’s top oil producer Saudi Arabia has announced a plan to raise fuel prices. You can now see that this is indeed a global problem. The truth is that the NNPC does not have the resources for, nor is it designed to meet this increase in supply. The result is the crippling fuel situation across the country. Pushed to supply 90 per cent of the products required for domestic consumption, the NNPC has continued to utilise crude oil volumes outside the 445,000 barrels per day allocated to it, thereby creating major funding and remittance gaps into the Federation Account. As I said earlier, there is no provision for subsidy in the 2016 budget. The erstwhile petrol price of N86.50 gives an estimated subsidy claim of N13.7 per litre, which translates to N16.4 billion monthly. There is neither funding nor appropriation to cover this.”he said.