Daily Independent (Lagos)
Bassey Udo, David Agba, Chesa Chesa And Oladunjoye Phillip
20 November 2008
Abuja/Lagos — It is simply not possible to sell fuel at N50 per litre, the government has flatly argued, despite the lower price of crude on the international market, which should benefit consumers.
Part of the reason, advanced on Wednesday, is that the government would spend about N1.2 trillion to subsidise pump price this year alone.
The bright news, nonetheless, is that the commodity will be available during the Christmas and New Year festivities, going by the word of the Nigerian National Petroleum Corporation (NNPC).
Minister of State for Energy (Petroleum), Odein Ajumogobia, who made the first point, said consumers cannot enjoy the benefit of the reduction in price on the international market because the deregulation of the petroleum sector was not agreed to by Nigerians when the price was high.
He admitted to reporters after Federal Executive Council (FEC) meeting in Abuja that the landing cost of fuel imports has reduced to N50 per litre even though the pump price the government fixed last year remains at N70.
"We cannot eat our cake and have it; we agreed with Labour last year that the pump price will be N70. We have a regulated market for PMS (petrol). It is something that we are looking at seriously and we will take a decision about it very soon.
"We can't enjoy the benefit of deregulation because it is only AGO (diesel) that is deregulated. PMS and kerosene are still regulated. We need to take a holistic view of the sector and see how we can put all petroleum products in one basket, so that as the prices go down in the international market, they'll also go down locally.
"However, the implication of that is that if the international prices of petroleum products go up, we'll also have to pay more locally. We need to look at the situation holistically and find a solution," Ajumogobia said.
The assurance of stable fuel supply was given by NNPC Group Managing Director, Abubakar Yar'Adua, regardless of the fact that "the Kaduna Refinery has been shut down for the TAM (turn around maintenance).
"The TAM project would last for approximately 60 days. The temporary closure of the refinery would not lead to scarcity of petroleum products, as adequate arrangements were in place to ensure availability, especially during the forthcoming festivities.
"Some new refineries are expected to come on-stream in no distant future and these will make significant contributions to the refined product pools."
Yar'Adua also spoke of the NNPC collaborating with the Petroleum Trust Development Fund (PTDF) to train about 2,500 welders to raise local content in the oil and gas industry.
The NNPC achieved the 45 per cent local content target in 2006, and efforts are on to hit a target of 70 per cent in 2010, he added.
The disclosure of the N1.2 trillion fuel subsidy was made by Oil and Gas Implementation Committee (OGIC) Secretary, Bello Gusau, at a workshop in Abuja that was organised for energy correspondents by the Petroleum Products Pricing and Regulatory Agency (PPPRA).
He said N600 billion had been spent on subsidy by June this year.
He regretted that the refineries, pipelines and depots remain in bad shape with under capacity utilisation, making Nigeria to depend on fuel imports for 80 per cent of daily demand.
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