Kachikwu says NNPC wrong on petrol price hike
The Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu PHOTO: Ladidi Lucy Elukpo
The Minister of State for Petroleum, Dr Ibe Kachikwu, says the recent N4 increase in price of petrol in Nigerian National Petroleum Corporation (NNPC) filling stations, is wrong.
Kachikwu said this after receiving an award at an event organized by the Petroleum Products Pricing Regulatory Agency (PPPRA) in Abuja on Sunday.
NNPC had been selling fuel at N141 but on Thursday, Nov. 3 increased it by N4 to the government benchmark of N145.
”It is obviously humbling and too early in the day to receive an award and to be recognised so soon in some of the things we are trying to do. It is humbling, I thank them very much.
”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 told newsmen.
Kachikwu said the increase could be as a result of foreign exchange differentiation.
He said there were areas within government controlled aspects like payments to the Ministry of Transport and the Nigerian Ports Authority that were foreign currency denominated.
”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, however, promised to discuss with industry operators.
The minister said: ”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, Kachikwu assured that President Muhammad Buhari was committed to finding lasting peace in that region.
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1 Comments
The government needs to stop messing around with price regulation and allow the market to deal with the price. yes the minister is right that there need to be more focus on ensuring consumer fairness. however the focus of the government should be increasing local refining, bringing in refinery investors and increase supply of fuel. Those are things that would force the price of fuel down via the market. it would also reduce the pressure on forex.
We will review and take appropriate action.