Petroluem Minister Confirms Oil Sector Deregulation To Take off In Few Days

  

The Nigerian government appears set to introduce policy changes to finally herald the take off of deregulation of the downstream sector of the petroleum industry, minister of state petroleum resources, Ibe Kachickwu, confirmed on Tuesday.

The  government is planning to unveil in a matter of days the new policy, which would see a minimum of 27.17 per cent hike in the price of petrol.
Officials familiar with the matter had told PREMIUM TIMES that deregulation, which would effectively see the end of subsidy payment in the petroleum industry, would likely push petrol prices to about N110 per litre at Nigerian National Petroleum Corporation, NNPC-owned filling stations and higher at other independent outlets.
it was learnt on Tuesday that a new price band of between N135 and N145 per litre of fuel has been proposed for marketers under the regime, while adjustments would be made to the ex-depot price in the Petroleum Products Pricing Regulatory Agency, PPPRA pricing template.
Speaking in Kaduna during the second town hall meeting organised by the federal ministry of information and culture, Mr. Kachikwu confirmed that in the next few days, the new policy which is expected to help address the fuel scarcity crisis, would effectively take off.

“We are coming up with a new policy in the next few days that will allow our fuel price swing along with international pricing,” the minister said. “We are now transiting into fuel modulating pricing, because we do not have sufficient foreign exchange to continue fuel importation we have been doing.”

The minister said the introduction of price modulation mechanism early this year had helped stabilize the problem, pointing out that it was becoming necessary for the country’s oil sector to reflect global pricing of its fuel products.
To demonstrate the seriousness to end fuel subsidy payment in the country, Mr. Kachikwu said government deliberately did not have any budgetary allocation for fuel subsidy in the 2016 budget approved last week by the National Assembly.
He said since the federal government managed to settle about N600 billion outstanding claims by marketers for subsidy inherited from the previous administration, it was determined not to continue paying fuel subsidy in the country.

He said since the NNPC did not also have the logistics and coverage for effective distribution of the product 100 per cent, it was necessary that the industry was opened up for effective participation by private operators.