Minister of State for Petroleum Resources, Ibe Kachikwu, has again expressed optimism that Nigeria would stopped the importation of Premium Motor Spirit, PMS, commonly known as Petrol by 2019.
Kachikwu made the comments on Tuesday during a public hearing organised by the House of Representatives on the review of petroleum pricing template.
He said that the present administration has in less than two years revived Nigeria’s refineries that were hitherto moribund to contribute about eight million out of over 20 million litres of petrol consumed in the country daily.
The minister explained that government introduced a model which attracted foreign investors to partner with the Nigeria National Petroleum Corporation, NNPC, to repair the country’s refineries within the two-year period.
Kachikwu assured that by the end of 2018, the NNPC “must be able to deliver on some of the terms given them, one of which is to reduce petroleum importation by 60 per cent.”
“By 2019, we should be able to exit completely on the importation of petroleum products in this country.
“Cognizant of the fact that Dangote is building one refinery, we expect to have an excess situation,” he said.
Kachikwu insisted that Nigeria must also have the capacity to stop exporting crude oil which he likened to selling agricultural produce in an unprocessed manner.
“The world is leaving that, every member of OPEC is leaving that because of the pricing, volume and market challenges is now shifting from selling crude to selling refined petroleum products.
“That is what this country must do and there is a template we are working on,” the minister said.
On efforts by government to promote local refining of crude oil, the Minister said plans were on to “create an investment environment that pulls individuals from illegal creek activities to legal business activities.”
“We are looking at modular refineries,” he said. “About 60 licences were given out just before this government came in and none of that was utilised because it requires a lot of money, land and crude security.
“But now we are going out to identify refineries, get individuals who can build refineries on the same platforms where our refineries are and identify some key specific modular refineries backed up by foreign investments working with state governments.
“Hopefully this will address the restiveness you see in the Niger Delta.”
Kachikwu brushed aside the idea of reducing the pump price of petrol, maintaining that there was no padding in the current pricing template for petrol which currently sells at N145 per litre.
He explained that among other factors that affect the price of petroleum products, the issue of exchange rate is the major challenge.
He said: “The problem is with foreign exchange rate. There are two key elements in the template, how much you buy it is internationally fixed, it is not a Nigerian issue the cost of foreign exchange is a monetary policy issue.
“So, at the time we did the template the Central Bank of Nigeria monetary policy was N245; that was the basis upon which we calculated the pricing, today N305 is the exchange rate.
“And what we have tried to do is to ensure that anybody who sells us foreign exchange follows basically the instructions of the CBN in terms of the amount.”