Petroleum minister confirms oil sector deregulation to take off in few days
The Nigerian government appears set to introduce policy changes to finally herald the take off of deregulation of the downstream sector of the petroleum industry, minister of state petroleum resources, Ibe Kachickwu, confirmed on Tuesday.
It was exclusively reported on Monday that government was planning to unveil in a matter of days the new policy, which would see a minimum of 27.17 per cent hike in the price of petrol.
Officials familiar with the matter had said that deregulation, which would effectively see the end of subsidy payment in the petroleum industry, would likely push petrol prices to about N110 per litre at Nigerian National Petroleum Corporation, NNPC-owned filling stations and higher at other independent outlets.
Also it was learnt on Tuesday that a new price band of between N135 and N145 per litre of fuel has been proposed for marketers under the regime, while adjustments would be made to the ex-depot price in the Petroleum Products Pricing Regulatory Agency, PPPRA pricing template.
Speaking in Kaduna during the second town hall meeting organised by the federal ministry of information and culture, Mr. Kachikwu confirmed that in the next few days, the new policy which is expected to help address the fuel scarcity crisis, would effectively take off.
“We are coming up with a new policy in the next few days that will allow our fuel price swing along with international pricing,” the minister said. “We are now transiting into fuel modulating pricing, because we do not have sufficient foreign exchange to continue fuel importation we have been doing.”
The minister said the introduction of price modulation mechanism early this year had helped stabilize the problem, pointing out that it was becoming necessary for the country’s oil sector to reflect global pricing of its fuel products.
To demonstrate the seriousness to end fuel subsidy payment in the country, Mr. Kachikwu said government deliberately did not have any budgetary allocation for fuel subsidy in the 2016 budget approved last week by the National Assembly.
He said since the federal government managed to settle about N600 billion outstanding claims by marketers for subsidy inherited from the previous administration, it was determined not to continue paying fuel subsidy in the country.
He said since the NNPC did not also have the logistics and coverage for effective distribution of the product 100 per cent, it was necessary that the industry was opened up for effective participation by private operators.
On the uncompleted Petroleum Training Institute, PTI in Kaduna, the minister said the ministry had created a skill learning department to coordinate staff training and the running of its specialized centres in Warri, Lagos and Kaduna.
The institute is programmed to provide skills to HND graduates in refining and solar energy so as to prepare them for a future in the oil industry.
On oil exploration in the northern part of the country, the minister said government had invited investors to explore for oil in the region, since research conducted revealed there was both oil and gas in commercial volume in the region.
“I am one of those who believe that with modern technology, oil and gas exist in every part of Nigeria,” he said. “We are putting a lot of investments and we are inviting people to invest money. We have set up a department which is doing three things for the North.
He said government was aggressively pursuing the programme to find oil in the region, pointing out that it was in the country’s interest for that to happen, especially given the problems the government was having with oil pipelines.
Besides, the minister said government was focusing attention on clean energy development, particularly solar energy, which is available in abundance in the northern part of this country.
“We are promoting the concept of partnership in oil. We believe that every system has a relationship with oil in different perspectives. The programme is building 700 marketing outlets all over the country, with one per local government. We are asking the state governments to co-venture with the federal, by giving land for this project,” he said.
ENJOY FREE CONTENTS FROM US
IN YOUR EMAIL
Breaking News, Events, Music & More
Thank you for subscribing.
Something went wrong.