The minister of state for petroleum, Ibe Kachikwu on Thursday quelled rumours the government is planning on hiking fuel price.
He said though the market has to be broadened to allow marketers join in the importation process, the government has no intention of increasing the burden placed on Nigerians.
“For now the directives we are working on is that no price increase because people are already going through a lot of groaning and difficult time,” he said.
Speaking during the Nigeria International Petroleum Summit (NIPS) in Abuja, Kachikwu said the entry of the marketers into the importation of oil products is due to the inability of the Nigerians National Petroleum Corporation (NNPC) to solely bear the burden.
According to him, the NNPC as the last supplier of the product is no longer a feasible business model.
“It is not just something that can be achieved,” he added.
“Not taking it out and resurfacing tomorrow, that is the issue we need to go and address. The endemic business model. The business model is that the landing price is higher than the sale price, and second is that we do not want to increase the price. So, in between those two, we need to find things that enable us provide incentives to the private sector to come back to business.
“And it should be a short-term thing. Hopefully, it should be something that will last over the next 18 months, while the refineries are being re-kitted. But after that, if we still do not address the market fundamentals of the business, it will be like what you are suffering in power, whereby you have trapped 2,000MW of power that cannot be delivered because we have refused to pay the right price for power.”
When asked about the current fuel scarcity and the queues that have sprung up nationwide, Kachikwu said this situation might be on for a while.
He said the NNPC and the ministry are doing all within their power to fix the problem, the queues would not immediately disappear.
He said, “Even though I did tell the NNPC to make sure that there was no queue during this period, it should have been looked at literarily. It was basically saying that it’s gone on for a long time and you need to find a solution. The GMD has been very busy on a day-to-day basis and we are trying to implement whatever policies are in place currently to ensure that the queues do not come back. So I am sure we are going to continue to embed that policy.
“Has it gone away finally and for good? I don’t think so. I don’t think so in the sense that there are still a few things and there are importations taking place, there are reserves that are being rebuilt and so a bit of challenge. But I know what they’ve done is being able to manage the logistics angle very well.”
He added, “You also know that as we begin to trend into the late March period, the market dynamics change, products become slightly cheaper because of the summer and winter issues. So, what you might then have is that some marketers, who are on the fringes and who have efficiency levels, might begin to bring in a few cargoes themselves and supplement.
“But I’m hoping that before then, some of the resolutions that we have come to, which his Excellency is considering, would have been approved and it will give the NNPC a lot more leeway in terms of being able to address this issue. So I’m hoping it’s (petrol queues) not going to come back.”