Palliative Measures: Kerosene, diesel to cost less

Taiwo Adisa, Abuja - 06.02.2009

AS a follow-up to the recent reduction in the prices of the Premium Motor Spirit(PMS), otherwise called petrol, the Federal Government is set to ratify a set of palliatives aimed at reducing the effects of the global economic meltdown.

Among the measures being considered is the reduction in the prices of kerosene, diesel and aviation fuel.

A source said in Abuja on Wednesday that the government’s Economic Management Team, which was reconstituted this week, had drawn up a number of measures that would reduce the impact of the economic burden on Nigerians.

The source said that a major item is another reduction in the prices of petroleum products, saying that this time, it would affect kerosene and diesel, which is commonly used in industries.

It was gathered that though the items were yet to be ratified, a decision had been taken on the petroleum products.

For instance, the government is said to have rejected the position of the Petroleum Products Pricing Regulatory Agency (PPPRA), which claimed in its latest template that petrol should be selling for N68.

Experts were said to have argued against the conclusion of the PPPRA, adding that since the price of crude oil had fallen by about 200 per cent in the past months, it was not possible for the end products to maintain a stagnant price.

The Economic Management Team was said to have concluded that prices of petroleum products should be further slashed to justify the fall in the global prices of crude oil.

It was also gathered that a reduction in the local prices of petrol and petroleum products could serve as an avenue to address the huge demand for foreign currency and thereby stabilise the value of the naira.

“For the first time in this country, what has gone up came down, but we are not resting on our oars; these things are still being ratified and we will get them across at the right time,” a source said.

Besides the need to stabilise the naira, the government is also said to be targeting a reduction in air fares charged by the domestic airlines with a “massive” reduction in the prices of aviation fuel.

As an immediate measure, the government is also said to be considering the removal of import duties on certain goods and food items, while it gears up efforts at local production.

“After a final look is taken at the working document by the economic team, the Federal Executive Council will also ratify these items and then the nation would be briefed,” a source said.