SENATE SETS THE STAGE FOR FUEL PRICE INCREASE, REMOVES EQUALISATION FUND

Nigerians living far from petroleum depots or in riverine communities may be burdened with high price of petroleum products, especially Premium Motor Spirit (PMS) otherwise called petrol if President Muhammadu Buhari signs into law the current version of the Petroleum Industry Governance Bill (PIGB).

Already, the Senate has expunged the Petroleum Equalisation Fund (PEF) from Part IV of the piece of legislation, implying that consumers would have to pay for the price parity, which had been addressed by the fund since 1975.

PEF came into existence to primarily address challenges of price differentials through the Uniform Pricing Mechanism (UPM) by ensuring the equaliation of transportation deficits of petroleum products.

Buhari had declined assent to an earlier version of the PIGB stating that “expanding the scope of the Petroleum Equalisation Fund made some provisions of the draft law to be in conflict with his administration’s policy.

The equalisation levy on PMS inclusive of bridging, National Transportation Allowance (NTA) and Marine Transport Average (MTA) was 7.66 per cent.

But a five per cent fuel levy could be introduced for infrastructure financing.

Though there is also the fear that the absence of taxes on some white products such as AGO, DPK and LPG might enthrone a regime of unchecked exploitation by producers and operators.

Source: Guardian