Nigeria will
stop importing refined petroleum products by 2019, Mr Ibe Kachikwu, the
Minister of State for Petroleum Resources, said on Tuesday in Abuja.
Kachikwu
made the disclosure at a public hearing on the review of petroleum pricing
template for Premium Motor Spirit (PMS) 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 (NNPC) to repair the
country’s refineries within the two years period.
“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,’’ he said.
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.
“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.
“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,’’ the minister
said.
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.
“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 (CBN) 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,’’ he
said.
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