Fidelity bank card banner Camano banner
Fuel Price Hike: Don’t expect any palliatives, Kachikwu tells Nigerians

By News Express on 13/05/2016

Views: 2,025


The Minister of State for Petroleum, Mr Ibe Kachikwu says the lifting of petrol price should not be the basis for which government will provide palliatives to its citizens.

Mr Kachikwu was speaking on Channels Television’s Sunrise Daily on Thursday, where he defended the change in pump price for Premium Motor Spirit, PMS by the federal government from N86.50k to N145.

The minister stressed that no marketer has been told the amount to sell its product, but that the Nigerian National Petroleum Corporation (NNPC) will be hoping to sell at 135 Naira per litre.

“As we go into the hinterlands, NNPC stations will be hoping to head towards more of 135 Naira than the 145 Naira band.

“How did we come to the price of 145? It’s a simple conversion of using foreign exchange at 285. That 285 is from nowhere, it is basically the secondary source that people buy FX from versus the 320 which is black market.

“If you convert it and throw it in you will get about 141, 142 or 143. So there isn’t much of palliative elements left there for you to use. It is simply, ‘go out, find your product, your cost is covered, there is an opportunity for your efficiency to make money, come and deliver.’

“It is not the lifting of petroleum pricing that should be the basis in which government provides a palliative, government has a responsibility to provide social palliatives in an ordinary course of running the day to day administration of a government and they are doing that.

“If you look at 2016 budget, there are loads of such palliatives.”

The minister would not state if the latest move by the Nigerian government is full or partial deregulation. He said: “I try not to get into the semantics of deregulation or no deregulation but the reality is that we are liberalising, we are freeing up the economy, and we are freeing up the business.

“The ultimate of what we are headed for is that everybody should be able to do the business, bring in the product.

“I hear people want to have an argument about whether it is full deregulation or partial deregulation but at the end of the day, the objective is what was achieved with diesel or AGO, which is that the government will have less control over the business and individuals will be free to compete so that Nigerians will have the advantage of that competition.”

In response to questions regarding why the price of petrol has been capped when same has not been done for the price of diesel, Mr Kachikwu indicated that this could be a temporary situation.

“Because of the sensitivity of PMS, you want to be sure that at the initial stage there are some guidelines in terms of how you do your pricing but ultimately, obviously we will let the market dynamics take place.”

He added: “What we have done is an upper cap, we have not told anyone what price to sell. We expect that the efficiencies will force people to determine their prices,” stressing that the price band of 135 to 145 Naira are “guideline prices.”

 “It’s going to depend on how much you find your FX for, how efficient you are, how invested you are through the whole entire chain of the business because if you are invested in the tankage, importation, distribution and the logistics, you have greater efficiency and those will impact your prices.”

The minister noted that the decision was made with the input of major players in the sector, stressing that this is a “transition period” towards achieving sufficient availability of the product.

Nigerians have also expressed fears that the 145 Naira price cap might give marketers the liberty to sell for far above 200 Naira considering the similar high prices it has been sold since fuel scarcity started across the country.

But the minister assured Nigerians that the new measure would address this.

“NNPC provided all these products highly subsidised and people took advantage of it, went out and made their own profit margins. But now these individuals are going to start bringing in their own products.

“Even when NNPC sells its own product, it will sell at those prices, so there wouldn’t be opportunity for those short term arbitrages unless those benefits and pricing come from your own skill set, experience and efficiency.”

•Excerpted from a Channels TV report. Photo shows Dr. Kachikwu.

Source News Express

Posted 13/05/2016 12:09:18 PM

 

 

CLASSIFIED ADS

 

You may also like...
Female undergraduate found dead behind Anambra Government House...

Southeast activists attack Soludo, Utomi, Chidi Odinkalu and...

Why Americans work so hard

60 percent hospital attendance in Ebonyi caused by...

Nigeria will fulfill its financial obligation to AU:...

Hoodlums attack Atiku’s campaign office in Ebonyi, destroy...

Ford unleashes all-new compact Figo

Banks’ €18bn at risk as accounting scandal takes...

BREAKING NEWS: Explosion rocks Ohanaeze President’s home

Businessman petitions SSS, NSA, police on attempt to...

Northern Governors move to revive Bank of the...

Boko Haram kills 8,000 in one year

 

Latest News HAPPENING NOW: Many trapped as three-storey building collapses in Jos IPOB blasts Tinubu, calls him a disgrace to noble Yoruba ancestry NIPOST Board moves to avert strike, summons emergency meeting of Union, Postmaster-General Umahi swears-in new Ebonyi Chief Judge 5 repentant kidnappers surrender to police How I slept with my brother-in-law in error – Housewife Atiku, PDP play 'rigging' videos in court Siasia opens up on mother’s kidnap COZA saga: Outrage as CAN sides with Fatoyinbo over rape allegations Police parade 13 suspected kidnappers of Buhari’s district head Cultists gun down final year varsity student in Cross River Notorious kidnapper arrested in Abia

 

Most Read NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (506,910 views) Nigerian female sex addict opens up, says ‘I like it with both men and women’ (430,610 views) Shameless Genevieve Nnaji exposes breasts in public (372,183 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (316,118 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (281,407 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (246,750 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (238,246 views) 10 cars more expensive than Jets (221,642 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (220,399 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (208,105 views) Lagos plane crash: Journalist releases victims’ names (187,786 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (186,486 views)

 

NNPC 2019 National Science Quiz Competition

CBN banner advert

UBA Wise Savers Promo

 

Categories Advertorials (3) African Press Organisation (81) Art & Literature (96) Business & Economy (4,351) Business Verdict (76) Columnists (1,070) Complaints & Requests (95) Enterprise & Opportunities (210) Entertainment (634) Features (776) Global Business Monitor (394) ICT Monitor (53) International (3,709) Interview (192) Live Commentary (30) Love Matters (163) Maggie's Blog (334) News (48,643) Opinion (1,288) Pidgin (17) Politics (11,151) Religion (1,048) Sports (2,094) Stock Watch (39) AMA & Al Jazeera Global Update

 

 

 

 

 

APO Group Partner

 

 

CLASSIFIED ADS

GOCOP Accredited Member

GOCOP Accredited member

 

 

Africa Media Agency and Al Jazeera