The Minister of State for Petroleum Resources, Ibe Kachikwu, has said he is unaware of the recent N4 increase in price of petrol at Nigerian National Petroleum Corporation (NNPC) filling stations across the country..
Kachikwu staed on Monday in Abuja that it was “wrong” for NNPC to have increased price to N145 without prior notice or explanation.
“First, I am not aware that the NNPC has increased price. I need to look into that. It is a bit of surprise for me, because there are processes in doing this, if they have done that, it means they are doing it wrongly.
“Let me find out what the facts are,” he told journalists.
However, he explained that the increase could be as a result of foreign exchange differentiation.
He said there were commitments like payments to the Ministry of Transport and the Nigerian Ports Authority that needed foreign currency.
“Having said that, the reality is that what we did at the point where we did some liberalisation, was to enable the free market float the price.
“Obviously, as you look at foreign exchange differentiations and all that, it would impact. The worst thing you could do is to go back to an era where we basically were fixing prices.
“What we ought to be doing was watching the prices, making sure that they are not taking advantage of the common man; making sure that the template is respected.
Kachikwu said the template should have been worked on before any hike in petrol price.
“One of the things I think we had hoped to do, which we should still do, before we embark on any price increase is to work on those templates,” he said.
He, however, promised to discuss with industry operators.
The minister said: “those who are investing must be able to predict the pricing methodologies, the pricing consequences and the actions, to be able to justify their investments.
“At the end of the day, I think PPPRA is the one that has the authority to say it is time the template justified some level of movement.
“Otherwise, you have a crisis of individual decisions on pricing,” he said.
On the issue of insecurity in the Niger Delta, Mr. Kachikwu assured that President Muhammad Buhari was committed to finding lasting peace in that region.
NNPC had been selling fuel at N141 but on Thursday, increased it by N4 to the government benchmark of N145.
Before now, NNPC said it had no plan of increasing petrol price above N145 per liter. Group General Manager, Group Public Affairs Division, NNPC, Muhammad Garba-Deen, debunked the news of an increment above N145.
According to him, the statement being spread, was made within the context of technical explanation, not within the context of downstream operations.
He said if there is going to be a price hike, the agency responsible for fixing the price of petrol, the Petroleum Products Pricing Regulatory Agency (PPPRA), will educate Nigerians on the reasons for the increase.
He added that at present, there was no subsidy on petrol, and that the long-term contracts entered into by the NNPC with buyers and suppliers had addressed the issue of foreign exchange volatility.
“As per this moment, there is absolutely no plan to do that (increase price) and no need to do that, because we have more than enough supply; we have very robust stock of product in our custody.
“ In addition to that, we also have long term procurement contract with our suppliers.
“The usual reason that would necessitate a review of price at the moment had been taken care of. We have long term procurement contract with our suppliers.
In September, FG through the Petroleum Product Pricing Regulatory Agency, PPPRA, had also rejected call to further increase the petrol pump price per liter.
The rejection came after the forum of former Group Managing Directors of the Nigerian National Petroleum Corporation, NNPC, called for the price increase, asking for removal of price cap in the pricing template.
A removal of the price cap, gives marketers freewill to sell petrol at their desired prices- on several factors such as the exchange rate and international crude price. This means Nigerians would have to pay more given the Naira exchange rate going down by over 50 percent to about N412.


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