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Published On: Thu, Mar 19th, 2020

Coronavirus: Buhari slashes petrol price to N125 per litre

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President Muhammadu Buhari

  • FG imposes travel ban on 13 countries
  • To cut 2020 budget by N1.5tr
  • CBN announces N1.1tn intervention fund
  • As confirmed cases of virus rise to 5


The Federal Government, Wednesday, announced the reduction in pump price of premium motor spirit (PMS), popularly called petrol, from N145 per liter to N125 as part of measures to mitigate the impact of coronavirus on the economy.
This is just as the Federal Government has placed a travel ban on 13 countries.
Minister of State (Petroleum Resources) Timipre Sylva who made the announcement at a press briefing at the Presidential Villa, Abuja said the price cut will also affect kerosine and diesel which will be worked out by the Petroleum Products Pricing Regulatory Agency (PPPRA).
He said the new price regime takes effect immediately.
According to the Minister, the approval for price reduction by President Muhammadu Buhari is a direct consequence of the falling oil prices at the international market due to the spread of the deadly coronavirus which has been declared a pandemic by the World Health Organisation (WHO).
Crude oil prices have crashed from $60 to $30 causing rising fears of a possible global economic crisis.
Sylva said going forward, the government would allow the international prices of crude to determine the prices of the finished products in the country.
Sylva announced the price cut after he took time off from the weekly meeting of the Federal Executive Council (FEC) to consult with members of the organized Labour in the oil and gas sector.
Recall that the Minister had last weekend hinted of a possible reduction in petrol pump price following the tumbling prices of crude at the International market.
“This is a developing issue. We are still consulting, we are still following it closely. Of course, usually, the product prices follow the crude oil price but we are still consulting, we’ll get back to you, please, be patient,” he had told State House Correspondents last Friday.
“The drop in crude oil prices has lowered the expected open market price of imported petrol below the official pump price of N145 per liter.
“Therefore, Mr. President has approved that Nigerians should benefit from the reduction in the price of PMS which is a direct effect of the crash in global crude oil prices
“In view of this situation, based on the price modulation template approved in 2015, the Federal Government is directing the Nigerian National Petroleum Corporation (NNPC), to reduce the Ex-Coastal and Ex-Depot prices of PMS to reflect current market realities.
“Also, the PPPRA shall subsequently issue a monthly guide to NNPC and marketers on the appropriate pricing regime.
“The agency is further directed to modulate pricing in accordance with prevailing market dynamics and respond appropriately to any further oil market development.
“It is believed that this measure will have a salutary effect on the economy, provide relief to Nigerians and would provide a framework for a sustainable supply of PMS to our country.”
Also at the briefing, the Minister of Interior, Rauf Aregbesola announced government’s decision to suspend issuance of Nigerian visas to travellers from 13 countries until the next four weeks.
He also said visas already issued to travellers to these countries had been cancelled as part of measures to prevent the spread of coronavirus in the country.
The suspension and cancellation of villas take effect from Saturday, according to the Minister.
The countries affected includes China, Italy, Iran, Spain, Germany, Japan, France, U.S, Switzerland, among others.
Also yesterday the Federal Government announced other far reaching measures approved at the Federal Executive Council (FEC) Wednesday to tackle the falling prices of crude oil at the global market.
The measures announced by the Minister of Finance, Budget and National Planning, Zainab Ahmed, while briefing State House Correspondents on the outcome of the weekly FEC meeting includes reduction of the N10.8 trillion 2020 budget by N1.5 trillion.
Also, the oil benchmark of $57 in this year’s budget has been slashed to $30, while there will no recruitments or replacements by government agencies till further notice except the security sector.
The monster said, however, that government is not contemplating downsizing of the her workforce as, according to her, President Muhammadu Buhari has directed that salaries and pensions of workers should be promptly paid despite the current economic down turn.
The Minister explained: ”What we have done is that we have written every ministry and given them guidelines on how these adjustments will be made to enable us have detailed imputes from the ministries.
”But I can just say that the bulk cut is about N1.5 trillion reduction in the size of the budget. This includes N457 billion from PMS under-recovery.
”It affects the federally funded upstream projects with about 25 percent cut. We work out the exact amount when we get inputs from the Ministries, Departments and Agencies (MDAs).”
On concerns of the economy slipping back into recession, she acknowledged that the government has concerns, saying: ”This is resulting in about 40 to 45 percent reduction and also it will affect the states because it means the Federation Account Allocation Committee (FAAC) will be significantly reduced.
”FAAC is just a pool of funds and we share what is realized, so it will affect the states as well. So we are expecting the states to take similar measures to amend the plans that we have made and bring them down to current realities.
”It is just a question of deferring some nonessential expenditure so that when things turn we might actually go back to our plans.
On plans to reverse the recently increased Value Added Tax (VAT) and excise duty, Mrs Ahmed said that she would not make any commitment on that right now because ”these are provisions in the law in the Finance Act and as you know we will even in the amendment to the MTEF and the budget have to engage with the National Assembly.”
”The fiscal authorities are working on with the fiscal authority team and we will get Mr. President’s approval before we come up with what we will announce to the public.”
On the directive to stop recruitment into government jobs, the minister said: ”What the agencies have been doing is replacement but even that is being suspended.
”When things improve, we will go back to the issue of recruitment, but for now, our wage bill is already very high.
”The President has directed that salaries and pensions must be paid unfailingly, so we are not looking at downsizing in anyway.
”We are maintain our workforce as it is but we are just stopping the increase in the size of the nominal roll.”
On benchmark, she said that the Federal Government was working on the worst case scenario of $30 per barrel ”and also we are holding to the production numbers of 2.18 million barrels per day.”
Central Bank of Nigeria (CBN) yesterday announced a N1.1tn intervention fund to support critical sectors of the economy amid the ravages of the coronavirus.
CBN stated this in a statement made available to journalists in Abuja Wednesday, saying that out of the N1.1tn, about N1tn would be used to support the local manufacturing sector as well as boost import substitution.
“Given the continuing impact of the disease on global supply chains, the CBN will increase its intervention in boosting local manufacturing and import substitution by another N1trillion across all critical sectors of the economy. The management of the CBN will meet with the Bankers Committee this Saturday at 10.00am to work out the modalities.”
Towards this effect, the CBN yesterday released additional N100billion loan support to Health Authorities for the production vaccines and test kits in preparation for the devastating impact of Coronavirus (Covid-19) in Nigeria.
This is in addition to the N50 billion soft loans to small businesses announced on Monday by the Apex bank.
CBN’s Governor Mr Godwin Emefiele who disclosed this said, the details of how the facilities can be accessed would be released soon.
Meannwhile, a six weeks old baby is among the five new confirmed cases of coronavirus (covid-19) in Nigeria, the latest number adds the total number of confirmed cases to eight in the country.
Speaking yesterday at a press conference on covid-19 update, in Abuja, the Minister said four of the cases are in Lagos and one in Ekiti.
He said three of the five new positive cases, arrived from the United States, while the remaining two came in from the United Kingdom.
According to the minister, “two of the three persons from the US are Nigerians; a mother and child, making the 6 week old baby the youngest covid-19 patient we have, and the 3rd person is an American national, who crossed the land border and becomes the first covid -19 case not arriving by air.
“The two cases from the UK are Nigerians. A detailed travel history of each person is being compiled and contacts are currently being traced, to identify persons who have recently been in contact with anyone.”
He said the National Emergency Operations Centre (EOC) led by the Nigeria Centre for Disease Control (NCDC) and supported by partners, is supporting response in the states.
Ehanire urged citizens not to panic, but allow experts in public health to guide response in a calculated, scientific manner, adding that false information and rumour to cause fear and panic must be avoided.

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