President Muhammadu Buhari on Wednesday approved the reduction in pump price of Premium Motor Spirit (PMS) from N145 per liter to N125.
The President gave the approval after the Minister of State Petroleum Resources, Timipre Sylva, presented the proposal to the Federal Executive Council (FEC).
The minister, according to sources in the presidency, briefed FEC on the need to reduce the pump price following the fall in oil price in the international market.
The sources added the government would allow the international price of crude oil to determine the product prices in the country.
Sylva is expected to meet with the labour union in the oil and gas sector before making a formal announcement on the price adjustment.
The new cut in fuel pump price will come as a relief to Nigerians because of its cumulative effect on all sectors of the economy.
Fuel is a major cost driver that cuts across all sectors of the economy and any upward or downward adjustment comes with ripple effects.
It is expected to impact the economy positively by reducing the costs of production.
The development will also trigger a reduction in transportation, which is one of the major factors in production in the country.
A drop in transport and production costs will also improve the living standards by reducing the cost of goods and services.
And when the prices of goods and services go down, inflation also subsides and these impact on the economy as a whole.