Ibe
Kachikwu, minister of state for petroleum, says the federal government has no
plan to jack up the pump price of petrol, which is 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)”, Alibi said.
Alibi said
Kachikwu told the hearing 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 Alibi.
Alibi urged
the public and indeed stakeholders in the oil and gas sector to disregard any
such report of a price increase.
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.
Kachikwu
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 in a 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
said 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.
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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