THE scarcity of petroleum products may linger up to June next year before a permanent solution to it when government-owned and private refineries would fully come on stream, Minister of State for Petroleum Resources, Dr. Ibe Kachikwu has said.

Mr. Kachikwu made the revelation when he appeared before the Senate Committee on Petroleum Downstream on Thursday.

Under the arrangement, the Nigeria National Petroleum Corporation (NNPC) would sell at N145 while independent marketers would import and dispense at their own rate.

“What this country needs is to ensure that the refineries work. It is shameful that after more than 50 years, we still do not have working refineries. Selling crude is like selling raw agricultural materials. Once the private refineries start working, this scarcity issue will be behind us. Before we get there, we have 18 months to manage this problem,” he said.

Other recommendations Kachikwu proffered as possible solution to the fuel crisis, which peaked during the Yuletide included a special foreign exchange price modulation as well as special tax consideration for independent oil marketers to reduce their financial burden.

He said if any of the three recommendations was adopted, fuel scarcity would be temporarily handled until refineries come on stream.

In addition, Kachikwu also called for a better border policing, arguing that since it was more lucrative to sell PMS in neighbouring countries, marketers will likely divert their products to those places.

“During the 18 months emergency period, we need to look at pricing. We need to find a way to get marketers back to importation. Landing cost is about N170-175. We sell at N145. We need to address this problem. There are series of items. But the key item is the international selling price for sale of refined product.

“There is a gap. How do we deal with the gap? Whatever we do, we need to free the marketers to do their business. Exchange rate was N145 when price was tagged in 2015. One model is for the CBN to create a special exchange rate for independent oil marketers to import their products. This will help.

“Is there a way to grant tax holiday for them? Government can look into the taxing system. If they do that, marketers will have more funds to import products. Potential of having a plural pricing system? That is, NNPC outlets can sell at N145, while independent marketers can import at their rate and sell at their own rate. Until we deal with this issue, we will not get out of the problem.

“We have not been able to deal with the issue of border policing. It is still more lucrative to sell this product outside the country. I am proposing that trackers be placed on trucks leaving the depots. That is one way to deal with this issue.”

Kachikwu who was accompanied by the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Mr. Maikanti Baru and other officials of his ministry, on behalf of President Muhammadu Buhari, apologised to Nigerians for the difficulties they went through over the fuel scarcity during the festive seasons.

“Our sympathies go the Nigerian people. I will not say much,” he stated.

Baru, however, had a different explanation, as he told Senators that “false media reports” that the Federal Government was planning to increase price of Premium Motor Spirit (PMS) was responsible for the crisis.

He claimed that 4,500 trucks loaded with PMS had been diverted within the period, a development which he said aggravated the continuous scarcity.

The GMD said NNPC was yet to get a mandate to increase pump price, but did not rule out any possible future increment.

Chairman of the committee, Senator Kabiru Marafa, in his earlier remarks, said fuel scarcity has become a reoccurring decimal in the nation’s history. He described it as worrisome and urged those concerned to get to the root causes of the problem.

Executive Secretary of DPR, Mr. Dantani Baba Ladan claimed that almost all the filling stations nationwide were found wanting in hoarding of petroleum products. He said products were hoarded in villages and communities. He, however, warned that those caught would be compelled to pay N275 per litre to the Federal Government.

Other stakeholders who spoke, called on the National Assembly to pass the Petroleum Industry Bill (PIB) and the Federal Government to deregulate the petroleum downstream sector to allow private sector players come in.

Attempts by lawmakers to bring up the issue of payment of N26 per litre subsidy on petroleum product was opposed by Marafa, who said it was not part of the deliberations.

BeeBeeOoh:
That's very good, Nigeria will be great. Buhari is working 24/7 to make Nigeria Eldorado..




Sai Barber


Barber till 3044

PMBNG:


PMB must complete his 8years.

predear:
What more do u expect from this insensitive administration.

boldaslion:


But how did Jonathan do it, even with high cost of crude in international market? They should consult him if shame will allow them.