The Federal Government has announced that from January 1, 2016 the pump price of Premium Motor Spirit, popularly known as petrol, will be reduced from N87 per litre to N85.
The Minister of State for Petroleum, Dr. Emmanuel Ibe Kachikwu, who spoke news men at the Port Harcourt Refinery Company in Port Harcourt, Rivers State, where he spent Christmas inspecting the plant said that he approved the new price for the agency yesterday, Thursday.
Kachikwu, who is also the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) said: “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.”
Kachikwu said that the new price is below the current N87 per litre and it would now convince Nigerians that the pricing modulation that the Federal Government promised to embark on a few days ago was not a trick.
He said that the government carried out analysis and research and that it has been realized that the country can fluctuate the fuel market in accordance with the crude oil market fundamentals.
He Justified government’s reasons for scrapping the Petroleum Support Fund, otherwise known as fuel subsidy, explaining 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.
“It is out. I signed off on it yesterday (Thursday). I imagine 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 off. The second is the earning capacity of the Federal Government is deteriorating by the day with lower prices of crude and come out more.”
Kachikwu said that from the application market realities for the pricing modulation, government has discovered that petrol would sell for either N85 or N86 per litre.
The minister recalled that it was from this axiom that President Muhammadu Buhari announced that the price of petrol remains N87 at the moment.
“But in applying that where we landed when we did the analysis for the very first time was about N85 or N86. So it is below N87. And maybe the first price that will come will reflect it.
“That was why Mr. President said that price will be N87 for now. And that is what we have in mind.”
On the security of the pipelines, Kachikwu said government had tried to stop 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, Kwara State. 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.
Kachikwu 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.”
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 the refinery is now ageing so one fault comes up after the other even after repair, but that would stop when government repairs the plant holistically early next year.
According to him, about 5.5 million litres daily of PMS is expected from the refinery in the next few days.
Other products to come from the plants, said Kachikwu “are 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 20 million 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 2.3 million. 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 do that, we will be getting 11 to 12 million litres out of this place.” [myad]
May God continue to keep,guide and protect our dear President and Commander-in-Chief of Nigeria's Armed Forces,even his entire cabinets.Every day i wake up these days,i just simply feel relieved and proud that i am a Nigerian with or without money in my pocket.I know for sure that better things are coming ahead.Nigeria must get to the level we are all expecting very soon by God's grace.I just want to encourage fellow compatriots to exercise a little patience while keeping the tune of prayers for this current government in top gear.It is well indeed!!!
May may God bless our Group Managing Director of NNPC.We are so very happy for what he is doing at the moment.More grease to your elbow sir!!!