From Kemi Yesufu and Ndubuisi Orji, Abuja
Minister of State for Petroleum Resources, Ibe Kachikwu, has said the Federal Government has set a -2019 target to end the importation of refined petroleum products into the country.
Speaking on how government will meet its set target, Kachikwu said refineries that were non-functional had been refurbished and are now contributing eight million litres out of over 20 million litres of daily petrol consumption.
The Minister who appeared at a public hearing of the House of Representatives’ Ad-hoc Committee on Review of Petroleum Pricing Template for Premium Motor Spirit (PMS), said government has attracted foreign investors to partner the Nigerian National Petroleum Corporation (NNPC) to repair the country’s refineries within a two-year 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 exit completely 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 then,” he said.
According to him, government is committed to creating an enabling environment for local refining of crude oil as selling crude without local capacity to produce refined products had proven to be detrimental to the country’s economy.
“The world is leaving that, every member of OPEC is leaving that because of the pricing, volume and market challenges are 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. 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 licenses 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.”
On the possibility of reducing the fuel pump price, the minister said N145 per litre pricing of fuel was as a result of market forces.
“In other words, the storage tanks, the amount you get by 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 with some of those because the effect of that to templating is an insignificant 1 or 2 per cent but that’s not where the problem is. The problem is with foreign exchange rate of conversion.
“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,” he stated.