The Minister
of State for Petroleum, Ibe Kachikwu, has denied news reports that the federal
government was planning to jack up the pump price of petrol, at present fixed
at N145 per litre.
Idang Alibi,
the Director of Press in the ministry in a statement on Thursday night,
clarified the minister’s submission made to the joint committee of the National
Assembly on Petroleum Downstream.
“The
Ministry of Petroleum Resources would like to categorically state that the
Honourable Minister never mentioned nor insinuated the need or plans by the
Federal Government to increase the current pump price of Premium Motor Spirit
(PMS),” Mr. Alibi said.
Mr. Alibi
restated what Mr. Kachikwu told the hearing, shown live on NTA that the
presidency has set up a special committee to identify the immediate and remote
causes of the fuel scarcity with a view to finding both immediate and long
lasting solutions to the challenge.
“The
Committee has been in rounds of deliberations in the past few days and these
discussions are still ongoing. The final decisions and recommendations from the
Committee would be passed on to the President and Commander-In-Chief for approval”,
said Mr. Alibi.
He urged the
public and indeed stakeholders in the oil and gas sector to disregard any such
report of a price increase.
Mr. Kachikwu
told the public hearing at the National Assembly on Thursday that the Nigerian
National Petroleum Corporation, NNPC, had incurred a cumulative loss of N85.5
billion in importing petrol and selling at the current retail price of N145 per
litre, since October 2017.
He said the
price was fixed in the first quarter of 2016, when crude oil was selling for
$49 and expressed fears that with crude price rising to $67 a barrel, the pump
price, may no longer be sustainable.
According to
him, the landing cost of PMS which was N133.28 per litre in 2016, is now N171
per litre and this has resulted into stoppage of importation of the product by
independent marketers.
This, he
said had made the Nigeria National Petroleum Corporation (NNPC) to be the 100
per cent importer of the product.
The minister
disclosed further that as a result of the N26 difference per litre between the
current landing cost of the product (N171) and pump price of N145, NNPC which
had been singularly importing the product at the volume of 25million litres per
day since October last year, has been incurring a daily loss of about N800-N900million,
cumulatively reaching N85.5billion today, in just three months.
According to
him, government has mandated him and a committee set up, to find ways out of
the problem until the local refineries become functional in 18 months’ time.
He said
three solutions are being considered.
“One, is for
the Central bank of Nigeria (CBN) to allow the marketers access forex at the
rate of N204 to a dollar as against the official rate of N305 to keep the pump
price of fuel per litre at N145.
“Two, to
give room for modulated deregulation where NNPC would be allowed to continue
selling at N145 per litre in all its mega stations across the country while the
independent marketers should be allowed to sell at whatever price is profitable
to them in all their outlets.
“Three, to
look at the direction of blanket subsidy for all the importers in bridging the
gap which would be like going back to a problem that had earlier been solved,”
he said.
He, however,
stressed that the final solution to the problem was for the nation to put her
refineries in good shape in a way that 80 per cent of local consumption of the
product should be provided for locally.
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