Ibe Kachikwu, the minister of state for petroleum has said that Nigeria will continue to import fuel in 2016 and beyond until the country can be able to provide enough fuel to sustain the demand of the people.
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He said that there was no subsidy in the price of the Premium Motor Spirit (PMS).
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The fuel subsidy regime, which cost the government about N1 trillion ($5 billion) in 2015, will be scrapped, the minister said.
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“Where we have a disagreement is if we get out of it, should we sell products at a certain price or should you let the free market to roll in so that you can skyrocket prices”.
The price modulation, according to the Minister, is not an outright removal of petrol subsidy.
He told reporters on Sunday in Kaduna that if crude prices increase, there would be a review which would be tackled under the newly introduced price modulation in the sector.
“The template announced by the minster implies a market driven pricing, which is potentially volatile, given the peculiarities of Nigeria and uncertainties on the worldwide scene. So I will say that by the end of January, if all things are working and we do not have any other complications arising from these aging plants, we will expect to see 10 million litres”, he said.
The CNPP scribe said the conference is concerned that low income earners could soon be faced with life threatening choices as they are forced to make decisions between spending all their earnings on transportation and going without food to keep their jobs or to make other desperate options. The objective is that one, we can not afford to continue to subsidize.
So, I don’t want to be involved in this controversy of subsidy or no subsidy and whether it is provided in next year’s budget or not.
“This government has simply continued the subsidy corruption from where its predecessor handed off. Nigerians therefore want a probe of the subsidies paid under the present government”.
Kachikwu said: “But in applying that where we landed when we did the analysis for the very first time was about N85 or N86 so it is below N87”.
He explained that the new price could go either way, either above the current selling price or below. On the speculated removal of subsidy, he lamented that the amount spent in the past for “political subsidy’ was huge”.
Kachikwu recalled that President Muhammadu Buhari had said that the price of petrol should remain N87 per litre for now, approved that the government should review the market and make the necessary adjustment in line with the dictates of the market.
He said what the government intends to do was to have some level of moderation with a view to having a stable market. “Today no subsidy, in January we will look at the situation and announce it”.
Kachikwu spoke during his tour of Kaduna Refinery and Petrochemical Company, KRPC.
He said the refinery will soon reach 2 million litres per day capacity as soon as an FCC unit is fully on stream.
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He further expressed optimism that the queues in the filling station will end in the next two weeks.
