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Nigeria needs long-term solution to frequent petrol scarcity – Kachikwu

By on November 19, 2015

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, on Tuesday said Nigeria would have to find a long-term solution to the frequent scarcity of petrol in service stations across the country, saying that she cannot continue on the same path.

Kachikwu who also doubles as the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), stated this shortly after inspecting petrol stations in and around the federal capital city, saying that there are critical systemic issues which pose challenges to seamless supply and distribution of petrol in the country that must be dealt with.

Although he did not list these issues, Kachikwu however explained that if left unattended, the reoccurring conditions of petrol scarcity would persistent in the country’s downstream petroleum sector to the detriment of the citizens.

He noted that he was working with President Muhammadu Buhari who is the substantive Minister of Petroleum Resources to find such long term solutions to the situation.

“Long term however because if we don’t deal with those systemic issues, these things will continue to repeat themselves and so long term answer is simple, we have got to look at the pricing dynamics and see how we can sustain supply at this sort of current environment.
“We have got to look at whether we have enough budgetary provisions to deal with these issues but I am working very closely with the president who is in charge of the ministry and takes very direct interests in the sector but we are going to find solutions to all of this,” Kachikwu said.

The minister noted that even with the supply challenges, the country cannot be said to be in danger of stock runout, adding that: “In a period of emergency when you have such situations, you find out that everything comes together but we are working on the technical and supply sides.

“There is no quagmire, there are products in stations. The president has approved payments to be released to marketers but realised that there is a procedure that requires  the approval of the National Assembly and he has written to the National Assembly,” he stated further.

While indicating that the government does not intend to undertake a downward review of its regulated price for petrol with regards to rumours around such, Kachikwu said: “I can be very clear that there is no price reduction coming because frankly, sustaining subsidy at the rate where we are is a major problem for the country and it is only happening through the magnanimity of the president.”

“We are looking at the price modulation and by January, we will have a price modulation dynamics that will enable us address the critical issues for the marketers but the issue of price reduction is not in the horizon at all.”

Speaking on delays in the disbursement of the subsidy debt owed to petrol marketers, the minister said: “I have had to talk to the Senate President and he is working with his team to ensure that something is done about that. It is all parts of the process which has to be followed but I have assured marketers that they will get their money.”

“I am sure within the next one or two weeks, this will be done and the president is looking at shorter ways to get this done and once we get the Senate’s concurrence even if the approval for the extra budgetary allocation has not come, the president will authorise the CBN to pay the money.

“We have made provisions already and have gotten the approval out of the executive but require the process of going through the legislature, we just don’t spend money that way, we are a process driven organisation and country, so that is what is happening,” he added.
He however called on Nigerians to remain patient with the government which he said is working to find a lasting solution to the situation.

On that he said: “Patience does it, NNPC is doing everything it can, looking at its stock to try and drive off this queue, marketers are beginning now with the assurance I have given to bring in products from outside of the shores of this country and so I expect this to be out in a couple of days.

“Basically the cause of this is a whole series of items. It is the issues of our pipelines being unable to pump effectively, our ability to pump through Mosimi is heavily restricted, we have been able to reactivate some of that and we are beginning to pump.”

“We also have the fact that because of the delay in the release of funds for petroleum subsidy, a lot of individuals are not bringing in products and so NNPC really has being the one trying to supply products to all parts of the country and so it is almost a 100 per cent scenario as opposed to what it used to be which is about 50 per cent, but I think this will go away. I am getting all the majors to be involved and I am instructing that the majors take charge of their stations and bring in products,” he said.

On further efforts to get the Department of Petroleum Resources (DPR) and other relevant agencies in the sector to live up to their responsibilities in this regard, Kachikwu said: “DPR, PPPRA, PEF, they are all working together to ensure that some of the rules are relaxed so that they can have a forward delivery. Some of the products are meant for later quarter. Currently, there is enough stock within our facility, trucking is the major problem especially within the Apapa area, but we are moving trucks massively.”

“Most of the stations in Abuja have products and it is just a matter of time. I am instructing that most of the stations remain open for 24 hours and the police will provide protection for them. I am expecting the majors to move in and supply products and take responsibility for their stations just as we have taken responsibility of our own at the NNPC.

“I have also instructed the DPR as they proceed that any station that has products and is hoarding, that they should sell all the products in there for free to customers who are out there and impose serious penalties on the stations. Sealing them is not the answer but penalising theme and I hope the message goes out loud and clear. I urge Nigerians to be a bit patient and stop panic buying,” said Kachikwu.

Meanwhile, the NNPC said that it had as at Tuesday dispatched up to 38,277,955 million litres of petrol to its Pipeline and Products Marketing Company (PPMC) depots across the country, out of which the DPR said a total of 149 trucks was supplied to Abuja and its environs.

 

[ThisDay]