Yemisi Izuora/Ijeoma Agudos
Minister of State for Petroleum Resources, Ibe Kachikwu has given an indication that a new pump price may come into effect January 2016.
This is coming as the Nigeria Labour Congress (NLC) decried the continuing nationwide fuel scarcity resulting in skyrocketing prices and long queues.
The NLC, in a statement signed by the president, Ayuba Wabba described the situation as ‘disheartening.’
But speaking in Abuja during his unscheduled visit to some filling stations within the metropolis, Kachikwu explained that it was high time Nigeria took practical look at the pricing dynamics of the oil and gas downstream sector.
He, however, was not emphatic that there would be no reduction in pump price of regulated products.
“If we don’t deal with these systemic issues, these things will continue to repeat themselves; so, long term answer is simple: We have got to look at the pricing dynamics by January and see how we can sustain supply in this sort of current environment. We have to look at whether we have enough budgetary provisions to deal with these issues, but I am working very closely with the President who is in charge of the sector and takes very direct interest in the sector. But we are going to find solutions to all of these,” he said.
Kachikwu also instructed the Department of Petroleum Resources (DPR) to distribute petrol of any filling stations involved in hoarding to customers free of charge.
While marketers have insisted that they would not import product until payments are made, Kachikwu gave the assurance that payment would be made within the next two weeks, saying: “I am sure within the next one or two weeks, this will be done and the President is looking at shorter ways to get this done, and once we get the Senate’s concurrence (even if the approval for the extra budgetary allocation has not come), the President will authorise the CBN to pay the money.”
Meanwhile, the Nigerian Extractive Industries Transparency Initiative, NEITI, has called for the reduction of crude oil allocation to the Nigerian National Petroleum Corporation, NNPC.
Outgoing Executive Secretary of NEITI, Mrs. Zainab Ahmed, said in Abuja that of all the crude allocated to domestic refineries, not more than 28 per cent is utilised; about 35 per cent is exported.
The revenue from the exported crude, according to her, is spent on financing NNPC operations. But, she insisted that if the Federal Government prunes crude allocation to the corporation it would be compelled to seek other means of financing and become more efficient.
Mrs. Ahmed said, “My advice and what NEITI has been recommending is that we should reduce the level of crude that we allocate to the NNPC. We have said over time that this will serve as an incentive for the refineries to improve their performance capacities.
“So if we reduce what we allocate to NNPC today, the refining capacity plus small margin, it will improve more capacity development for the refineries.”
She noted that, “In the past, the revenue from the sale of domestic crude oil had served as the major means of financing NNPC. If we reduce that, it means that NNPC has to look for some other ways to finance its operation and therefore it will be forced to become more efficient”.
She advised the Federal Government to review its expenditure on Petroleum Support Fund (PSF) also known as fuel subsidy and called for phased removal of the subsidy.