Nigeria's
Minister of State for Petroleum Resources, Mr Ibe Kachikwu has
announced a date when importation of fuel into the country will cease.
Minister of State for Petroleum Resources, Mr Ibe Kachikwu
Nigeria will stop importing refined petroleum products by 2019.
The Minister of State for Petroleum Resources, Mr Ibe Kachikwu,
said on Tuesday in Abuja at a public hearing on the review of petroleum
pricing template for Premium Motor Spirit organised by the House of
Representatives.
He said that within two years, the Federal Government revived
refineries that were non-functional to contribute about eight million
out of over 20 million litres of petrol consumed in the country daily.
He explained that the Federal Government initiated a model which
attracted foreign investors to partner with the Nigeria National
Petroleum Corporation to repair the country’s refineries within the two
years period.
He said, “This has consistently served as a target for this
government so that by December 2018, NNPC must be able to deliver on
some of the terms given them, one of which is to reduce petroleum
importation by 60 per cent.
“By 2019, we should be able to exist completely on the importation of petroleum products in this country.
“Cognisant of the fact that Dangote is building one refinery, we expect to have an excess situation.”
The minister said that Nigeria must also have the capacity to stop
exporting crude oil. According to him, selling crude oil is not
different from selling agricultural produce in an unprocessed manner.
He said, “The world is leaving that, every member of OPEC is
leaving that because of the prizing, volume and market challenges is now
shifting from selling crude to selling refined petroleum products.
“That is what this country must do and there is a template we are working on.”
He further said that the ministry intended to create an enabling environment that would promote local refining of crude oil.
He said, “The issue is not giving licences to illegality, the
issue is how do we ensure that we create an investment environment that
pulls individuals from illegal creek activities to legal business
activities.
“We are looking at modular refineries, about 60 licences were
given out just before this government came in and none of that was
utilised because it requires a lot of money, land and crude security.
“But now we are going out to identify refineries, get
individuals who can build refineries on the same platforms where our
refineries are and identify some key specific modular refineries backed
up by foreign investments working with state governments.
“Hopefully this will address the restiveness you see in the Niger Delta.”
On the possibility of reducing the fuel pump price, Kachikwu said
there was no padding in the petroleum pricing template for PMS currently
sold at N145 per litre.
According to him, 71 per cent of the cost is for the production and
freight, 18 per cent balance is covered by depot charges and retailers
margin.
He said, “In other words, the storage tanks, the amount you get
by verge of operating a filling station takes another 18 per cent, the
output of those is already taking you to roughly about 90 per cent.
“The transportation is less than 10 per cent; we probably can
do better; the templating is an insignificant 1 per cent or 2 per cent
but that’s not where the problem is.
“The problem is with foreign exchange rate
“There are two key elements in the template, how much you buy
it is internationally fixed, it is not a Nigerian issue the cost of
foreign exchange is a monetary policy issue.
“So, at the time we did the template the Central Bank of
Nigeria monetary policy was N245, that was the basis upon which we
calculated the pricing, today N305 is the exchange rate.
“And what we have tried to do is to ensure that anybody who
sells us foreign exchange follows basically the instructions of the CBN
in terms of the amount.”
-NAN
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