No plans to increase fuel price, Kachikwu restates

Minister of State for Petroleum Resources, Ibe Kachikwu

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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  • MP-001* [Joint Chief]

    “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.”

    So that you people will connive and it will now be scarce at the megastations. This is the most shambolic of all the three options. Why not invest into actually fixing up the refineries. Bring experts in via JV or whatever is competitive enough, set a target, get a commitment with agreements on monthly, quarterly or yearly milestones. It can be done only if there is sincerity and commitment

    • Gary

      Just like the PDP regime, no government wants to mess with anything that will jeopardize Dangote’s investment to monopolize the domestic fuel market.
      So policy is being shaped around avoiding any potential competition with Dangote’s heavily-subsidized Refinery that this APC hopes will be commissioned before the 2019 elections. That folks, is their solution to solving the fuel shortage problem in Nigeria. Dangote will thus work provide refined petroleum for Nigeria and the subregion at any price he wants. Then they will call it deregulation.

      • Okokondem

        As crazy and retrogressive as it sounds, (and of course there’s no chance of it happening), sometimes you wonder if the country, and the people, wouldn’t be better off inviting the queen back after 60+ years.

        At least while they are around we would be guaranteed running water, steady reliable power supply, a Healthcare system worthy of the name and accessible to most people, good roads to travel on, and of course functional, productive oil refineries that would keep the price of PMS affordable and supply reliable. Because nothing is working folks, across the board, and there’s no sign of light at the end of the tunnel, not in the near term.

        Just picture this, if we are struggling to provide PMS to consumers at affordable price as a major oil producer, imagine the scenario if we had no petroleum.

    • man

      they’ve been talking about fixing refineries for decades. do you think they will do it now? dangote will finish his own next year. they are waiting for that.

  • man

    these idiots will talk about refineries for years, that has been going since jonathan/diezani, and nothing happen.
    just stop lying and just allow market prices. people will pay.