Kachikwu wants Nigeria to domesticate bio-fuels initiative

Ibe Kachikwu Minister of State for Petroleum Photo: thisdaylive.com
Ibe Kachikwu Minister of State for Petroleum Photo: thisdaylive.com

Nigeria’s quest for bio-fuels as alternative to premium motor spirit, popularly called petrol, must ensure the domestication of supplies in the country, Minister of Petroleum Resources, Ibe Kachikwu, has said.

The minister, who spoke in Abuja on Tuesday while declaring open the national capacity building and sensitization workshop on bio-fuels, said changing the previous import-based bio-fuels policy was the best decision by government for the country.

“The Ministry of Petroleum Resources has a seven-point programme to ensure hydrocarbon-based fuels are delivered to customers in a sustainable manner, by removing structural problems in the industry and ensuring efficiency and productivity is brought around issues of fuel management in the country,” Mr Kachikwu said.

The minister, who was represented by his Special Adviser on Fiscal Strategy in the Ministry of Petroleum Resources, Tim Okon, said the country’s bio-fuels policy must consider challenges faced by government in delivering petrol to consumers.

He said the central framework of the bio-fuels policy must focus on delivering to the customer in a manner that was cost effective and removing distribution bottlenecks.

“Bio-fuels policy should reflect the concerns of funding, threats to food security, energy sustainability in the long term and also having an industry that does not create fiscal instability for the country.

“In many countries where fuel is E5 or E10 (that is mixing fuel with five or 10 per cent of ethanol), the industries are domestic. As we learn from many countries in the world how to add bio-fuels to the fuel mix, the industry must be domesticated,” he said.

The minister expressed the hope that bio-fuels policy that would be established would not require the NNPC to modify its import fuel tanks for ethanol and other chemicals that would add significant cost to its ability to deliver on key performance indicators for the ministry.

Besides, Mr. Kachikwu said, the policy must not require additional resources from government, to avoid creating additional macroeconomic instability in the system.

“Once the import-based bio-fuels import policy, which requires dollars to sustain, has been removed, government must avoid creating fiscal instability that it is trying to make uneconomic fuel economy,” he said.

On commerciality, the minister said a significant part of the bio-fuels guidelines must consider financial and business sustainability, pointing out that a viable bio-fuel industry must be accommodated in the market where people could exercise their choices to related fuels.

On the priority between food and fuels, the minister said government must consider the product and ensure that a subsidy scheme was established that would not create famine in Nigeria.

“If you drive resources towards fuel and create an imbalance in the food chain that will be a counterproductive effort. As part of the guidelines, we must look at how we can support a viable industry and at the same time not result in food insecurity.

“We must look at the long-term sustainability of bio-fuels with the perennial issue of oil price. Bio-fuels come in where oil prices are high, fuel prices have gone up and there is an opportunity to blend and still keep the price low. That means prioritisation must be in the context of the outlook of future oil prices.

The Executive Secretary, Petroleum Products Pricing Regulatory Agency, PPPRA, Victor Shidok, said the bio-fuels awareness programme was part of government renewable energy policy to diversify the country’s economy, conserve the forest, contribute to fuel supply stability, while providing clean energy to the country.

The workshop sponsored by the PPPRA in collaboration with Ministry of Petroleum Resources and NNPC, had the theme: “Bio-fuels: Nigeria’s New Economy”.

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