The Minister of State For Petroleum Resources, Ibe Kachikwu, on Thursday
said the Nigerian National Petroleum Corporation, NNPC, has incurred a
cumulative loss of
N85.5 billion in importing petrol and selling at the current
retail price of N145 per litre.
Kachikwu said the price was fixed in the first quarter of 2016, when
crude oil was selling for $49 and pointed out that with crude price rising to
$67 a barrel, the pump price, may no longer be sustainable.
Mr. Kachickwu made the explanation to the National Assembly joint
committee on Petroleum Resources ( Downstream).
According to Mr. Kachikwu, the landing cost of PMS which was N133.28 per
litre in 2016, is now N171 per litre, which 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 25
million 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, already government has mandated him and along with a
committee set up to find ways out of the problem which he said requires
emergency of about 18 months before the local refineries are expected to be in
good shape.
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.
In his submission , the Group Managing Director of NNPC, Maikanti Baru,
said the just ended fuel scarcity was caused by combination of factors ranging
from diversion of the product from depots by tanker drivers to neighbouring
countries where it sold between N300 to N400 per litre to outright hoarding of
the product by unscrupulous marketers at home.
According to him, the NNPC had prior to the scarcity, had 1.9 billion
litres in reserve, which was emptied as a result of panic buying arising from
rumour earlier made on social media about price increase, the one day strike
action embarked upon by PENGASSAN, hoarding and diversion by some dubious
players in the sector .
On his part, Director General of the Department of Petroleum Resources
(DPR) Dantani Ladan, revealed that most of the filling stations in the country
were found wanting in hoarding and diversion during the scarcity.
He said some of the stations’ personnel who were involved in storing of
the petroleum project had been arrested.
While calling on the general public to contact the agency with any useful
information on anyone hoarding fuel, he disclosed that the agency had charged
individual marketers to comply with Government pump price.
“For now NNPC is the sole distributor, individual marketers can help and
one marketer has been charged 127 million for going against the rules.”
In his closing remarks, the Chairman of the joint committee, Kabiru
Marafa, said the various submissions made by all the stakeholders would be
looked into.
He called for an urgent solution to resolve the wide gap existing between
the current landing cost and the pump price .
(NAN)
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