If the words of the Minister of State for Petroleum, Dr. Emmanuel Ibe Kachikwu, are to be taken serious, a new deal is in the offing for Nigerians in the new year. One product that has given Nigerians nightmash horrors over the years, would begin a new regime.
For a starters, from January 1, 2016 the pump price of Premium Motor Spirit, popularly known as petrol, would be reduced to N85 per litre. And for another, importation of the product will also be liberalised!
The Minister, who broke the news to journalists during a tour of the Port Harcourt refinery on Christmas Day said that the Federal government is working to reduce the pump price of petrol to about 85 or 86 naira per litre by Jan 1st.
He said efforts were on to get the refinery to achieve 60 percent production capacity and to supply about 11 million liters of petrol daily.
“If you look at the new PPPRA template that we developed and which I just signed off two days ago, when it is announced you will find out that for now, and I use the emphatic word of the President for now, the price of the refined product will actually be lower than 87 naira, It will be 85. We will probably announce that in January if the prices hold.
“Like I said, we have done a modulation calculation and it is showing us below N87. I imagine that if PPPRA publishes it today, it will become effective immediately. But the 1st of January that is when we are looking at.”
“What that does for you is that its modulating. If it goes up you move up, if it comes down you come down. So we take away the fact of having to go find funds to pay for these subsidies that we cannot afford.
“More importantly we try to be as close to the pump price that we have now as possible,” he said.
Revealing that he approved the new price temperate of the Petroleum Product Pricing Regulation Agency, PPPRA, the minister, who doubles as the NNPC Group Managing Director, expressed optimism that it would convince Nigerians that the pricing modulation that the Federal Government promised to embark on a few days ago was not a trick.
He noted that following government’s analysis and research, it has been realized that the country can fluctuate the fuel market in accordance with the crude oil market fundamentals.
Justifying government’s reasons for scrapping the Petroleum Support Fund otherwise known as oil subsidy, Kachikwu explained that government can no longer afford to subsidize the product following the fraud that has attended its operation.
He added that it has become clear that government earnings are dipping on daily basis.
His words: “It is out I signed off on it yesterday (Thursday). I imagined that in the next couple of days the marketers would get advice on that. The nice thing about the PPPRA, where I signed up on it yesterday is that the price will be far below N87.
“So for the first time people will understand that the pricing modulation I was talking about is not a gimmick. It is for real. We have gone to find out how we will be able fluctuate this market to reflect what the reality of crude market is. The objective is that one, we cannot afford to continue to subsidize .
“We can’t even understand where those subsidies were going to. There is a lot of fraud elements in it so we need to cut that of.
“The second is the earning capacity of the Federal Government is deteriorating by the day with lower prices of crude and come out more.”
On the security of oil pipelines, Kachikwu noted that the government had tried stopping the menace with military intervention to no avail before it engaged some private contractors who had worked with the majors for the crude pipeline management.
According to him, “the private contractors have taken over Atlas Cove, Mosimi and they would be extending the surveillance to Ilorin between yesterday and today.
“They will also look at the Port Harcourt and Aba axis,” he stressed.
The minister said that government is now beginning to have a clue of how to tackle pipeline insecurity, adding that it is far more expensive to convey petroleum and products through pipelines than trucking them by road.
He said from the briefing he got from the inspection of the refineries, they are close to re-opening.
“In the next one week, we are ready to see products out of here”, he disclosed.
Kachikwu said that a lot of the rehabilitation of the refinery was being done with intensive manual labour of the staff since paucity of fund affected the holistic change that is required in the factory.
He said that the refinery is now aging so one fault comes up after the other even after repair but that would stop when government repairs the plant holistically early next year.
The minister said about 5.5million litres daily of PMS is expected from the refinery in the next few days, listing other products to come from the plants as: “AGO, Kero and others. Where we love to be is to have half of the consumption of this country at the refineries at the minimum, which is about 20million litres. But where we are with the sleepless night I have had in the last few weeks any molecule is significant.
“Kaduna will still be doing 2.3million. Let’s start from there. And that is doing 60 per cent performance. This is still an assumption. I will like to see them getting closer to 80 or 90. By the time they time they do that we will be getting 11 to 12 million litres out of this place,” Kachikwu stated.