The Federal Government has said that it would only modulate prices of petroleum products not remove subsidy as being speculated.
The government is not interested in the removal of subsidy on petroleum products, but rather a price modulation that will reduce its involvement in pricing starting 2016.
The impression from a statement by National Planning and Budget Minister, Udoma Udo Udoma, was that the government would scrap subsidies.
But the Minister of State for Petroleum, Dr Ibe Kachikwu, while briefing reporters on the government’s position on Thursday, said there would be a periodical review of the Petroleum Pricing Template and a flexible management of the pricing system would be considered.
What he did not make clear is whether the government would be paying any form of subsidy under the new pricing regime or any flip ups in prices would be deflected to the consumers.
Kachikwu said said the review would allow marketers to trade freely and reflect prevailing international price of crude.
According to him, the review will be the key focus in the first quarter of the coming year.
He said the 97 Naira per litre projection would be a cap on the price of fuel with a gradual increment between the band of the current price of 87 Naira and 97 Naira until a fair price is reached in the pricing review.
The oil-rich nation is currently grappling with one of the worst fuel scarcity the nation has faced in recent time, with some service stations selling petrol higher than the 87 Naira official price.
Some service stations have been penalised by the regulatory agencies, but critics have said the agency lacked the manpower to effect adequate monitoring of the marketers activities.
The expectations of the coming changes in pricing regime has helped greatly in fuelling price unending scarcity in of the products in the market.
Many analysts question the template used by the Federal Government in arriving at the price range of between N87 and N97 given that oil is hovering at around $40. They believe that the prices of refined products ought to be lowered rather the anticipated upswing.
