Fuel scarcity to end in February 2016

DESPITE receiving N413 billion in subsidy claims, petroleum marketers may have suspended fresh im­portation of petroleum products, Daily Sun learnt yesterday.

The development, ac­cording to some import­ers, who pleaded not to be named, may have been re­sponsible for the unabated fuel scarcity nation-wide.

Indeed, some marketers told Daily Sunyesterday that the scarcity could linger till February 2016. Specifi­cally, they said the alleged plan by the Federal Govern­ment to remove subsidy on petrol next year and com­mence full deregulation by January 1, is already caus­ing ripples among market­ers.

The marketers, who claimed to be in full sup­port of the deregulation of the downstream sector, lamented that the secrecy surrounding its implemen­tation and take-off date is already causing uncertainty within the sector. “Market­ers are not against deregula­tion. But deregulation must be planned for. It must not be a hasty decision. We are entities that invest a lot in importation of petroleum products. If a decision that is to affect us must be taken, then, we must be taken into consideration. For now, un­certainty pervades the sec­tor,’ ’an importer said.

A source said Nigerians are not considering the va­garies involved in deregula­tion. There are speculations that with deregulation, a li­tre of petrol would sell for N97, which is a possibility on one hand. But consid­ering the current price of crude oil which sells for about $38 per barrel, what if this price slides further in the weeks to come and the permutation declines to less than N87 for a litre, who bears the loss?

The source said all these certainties surrounding the downstream sector have further dealt a debilitating blow on the current fuel scarcity. But the Minister of State, Petroleum Resources, Dr. Ibe Kachikwu, in a swift response to douse tension on the plan to increase petrol price to N97, denied such intention by government. Kachikwu, who is also the Group Managing Director of Nigerian National Petro­leum Corporation (NNPC), however, advised Nigerians to dispel such insinuations

He said the discourse has long left the realm of subsidy removal to a more scientific price modulation approach which entails an elastic price mechanism regime to be reviewed pe­riodically to reflect the pre­vailing international price of crude.

He explained that when operational, the novel price modulation system will place a N97 per litre cap on the price of fuel to ensure that Nigerians are insulated from the vagaries of the global crude price.

“I did not say that refined petroleum products will sell for N97 per litre next year. I said between a band of N87 and N97 we are going to be looking at prices and today, the prices are largely close to N87. So, there is no need to change the price,’’he said

The minister noted that to determine the price of pe­troleum products in future, the Petroleum Products Pricing Regulatory Author­ity (PPPRA), will under­take quarterly review of the crude market situation.

“I have not put a static figure. PPPRA will have to do the cal­culation to be able to announce what price of PMS (petrol) will sell for in January; but we do not anticipate any major shift because of the price of crude today,’’ he noted. 

The sun