We’ll Review Current Template Before Any Fuel Price Hike – Kachikwu
BEVERLY HILLS, November 07, (THEWILL) – The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu has faulted the recent N4 increase in price of petrol in Nigerian National Petroleum Corporation, NNPC, filling stations, explaining that the federal government will review its current pricing template before it can implement any increase in fuel price.
Kachikwu, who spoke in Abuja on Sunday after receiving an award at an event organized by the Petroleum Products Pricing Regulatory Agency, PPPRA, explained that some of the elements of the pricing template still lies within the government's control, and can be amended to keep retail prices within its current band.
NNPC petrol stations had been selling fuel at N141, but on Thursday increased it by N4 to the government benchmark of N145.
But speaking at the event, the minister said, “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 said, noting however 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.
According to him, “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.
“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.
In Kachikwu's words: “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, the Petroleum minister assured that President Muhammadu Buhari was committed to finding lasting peace in the oil-rich region.