Fuel Scarcity: Kachikwu explains persistence, insists no increase in pump price


In spite of the difference between the N170 landing cost of petrol and N145 pump price ceiling, the Minister of State for Petroleum, Dr. Ibe Kachikwu, insisted on Thursday that the federal government had no plans to jack up the price of the essential commodity.

The minister’s position was reinforced by the Senior Special Assistant on Media and Publicity to the Vice-President, Mr Laolu Akande, who, at a post National Economic Council (NEC) meeting briefing for State House correspondents in Abuja, said emphatically that price increase was not on the card for now.

Kachikwu, however, explained that the scarcity of petrol and the attendant queues at petrol service stations across Nigeria had lingered for long because the federal government had been unable to address the logistics and policy issues that could end the shortage.

Speaking at a press briefing in Abuja to intimate journalists with the ministry’s plan to host a new oil and gas conference and exhibition, the Nigerian International Petroleum Summit (NIPS), next week in Abuja, the minister said the country would have to address certain fundamental policy issues especially with regards to the price of petrol to make the scarcity go away.

He, however, reiterated that the government was not ready to effect any pump price increment, adding that President Muhammadu Buhari was sympathetic to the sufferings of Nigerians in this regard and thus committed to keeping the price at N145 per litre.

Also with regards to the country’s hosting of the maiden edition of the NIPS at a time its downstream petroleum sector is greatly challenged with petrol scarcity and the kind of message this could send to the global audience that would be attending the conference, the minister said he would direct the Nigerian National Petroleum Corporation (NNPC) to ensure the queues in Abuja are cleared before the conference starts.

“I can tell you behind the scenes, a lot of meetings are taking place because the fuel queue issue is both logistics and policy issues. We will need to address fundamental policy issues to enable it go away especially in the area where the pricing is showing differentials between the landing and sales price, what do we need to do to continue to sell at N145,” said Kachikwu.

He, however, added: “The president is obviously very committed in keeping the price of petrol at where it is because he realises and sympathises with the sufferings of Nigerians.

“We did a massive price hike two years ago under me, we don’t intend to do that again. We need quite a lot of efficiency re-engineering, that is one of the things that both the NNPC and most of the parastatals who are involved in this are doing. So, give us a bit of time, a little bit of patience.”

Responding to a question on how the country would host the NIPS in the midst of a lingering fuel supply crisis in the Federal Capital Territory (FCT), the minister said: “I take your point and my directive to NNPC would be to get these queues out of Abuja.

“The NNPC is working round the clock on this, if you remember when this first started in December, it was a lot more massive. Lagos is fuel queues free and a lot of the state capitals are. Abuja is still struggling because of the logistics issues. I haven’t gone round today but when I went round yesterday there was a huge improvement and I will be instructing the NNPC to do whatever it takes to ensure there was no queues next week.

“Quite frankly, they will have to do whatever it takes to get this eliminated in Abuja, that is the directive I will be sending to the NNPC and let them work night and day to put a lot more efforts in trying to do this.”

Also explaining the shortage at the end of the meeting of NEC at the State House, Abuja on Thursday, Bauchi State Governor, Alhaji Mohammed Abubakar, said the Group Managing Director of the NNPC, Maikanti Baru, briefed the council on the lingering fuel scarcity across the country.

According to him, the shortage was caused by what he described as an inter-play in exchange rate and the price of crude oil at the international market, explaining that the trend affects the landing cost of refined products in Nigeria.

Abubakar said given the development, the current N145 pump price of petrol is “almost impossible” and hence, NEC asked its committee to interface with the NNPC to examine the current cost of fuel.

“As at today, most of all independent marketers have stopped importing refined products into Nigeria. It is only the NNPC that has been doing it. And the NNPC has been suffering a lot of setbacks – the highest amount of under-recovery. By under recovery, it means the inter-play between the landing cost of a litre of the PMS in Nigeria and the pump price of that product.

“If the product lands at N170 for example and you sell at N145, immediately, you know that you have an under-recovery of about N25 for each litre of fuel. So, he submitted his report and the National Economic Council has a committee that has been interfacing with all revenue generating agencies of the federal government under the chairmanship of the governor of Gombe State.

“That committee has been charged with the responsibility of interfacing with NNPC with a view to determining the correct price for (premium motor spirit) PMS considering the price of the product in especially countries that are bordering Nigeria. Because that is one of the reasons that encourage smuggling of the products to these areas,” Abubakar stated.

But responding to a question on whether he meant that the committee was expected to come up with a new pump price of fuel, the Senior Special Assistant to the President on Media and Publicity, Mr. Laolu Akande, was swift to clarify that the committee’s assignment does not include a review of the current price of fuel, saying there was no plan whatsoever to review the price upward.