August 10, 2022


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Kachikwu rebuts price increment claims

3 min read

Indications has emerged that all is not well within the top management team of the Ministry of Petroleum and Nigerian National Petroleum Corporation (NNPC) over the recent fuel scarcity in the country.
Blueprint Weekend can reliably report that the Minster of Petroleum, Dr. Ibe Kachikwu and the Group Managing Director of NNPC Dr. Maikanti Baru, are working at a cross purposes towards finding lasting solution to the fuel crisis, which ravaged the country towards the last few days in 2017.
The misunderstanding and supremacy tussle between Kachikwu and Baru came to the fore again on Thursday when the duo appeared before the joint committee of the National Assembly on Petroleum Downstream.
Blueprint recalled that the duo had in October, 2017, engaged in the supremacy battle as the former accused the latter of not consulting him over some certain decisions and also accused Baru of awarding contracts running into billions of dollars unilaterally.
This allegation degenerated into accusations and counter-accusations, which dominated the media space for months.
At last Thursday’s hearing, the duo gave different accounts of factors responsible for the fuel scarcity in the contry.

The minister explained that the landing cost of PMS which was N133.28k per litre, has now increased to N171.
This, the minister revealed, resulted into stoppage of importation of the product by independent marketers, making NNPC the 100% importer of the product.
The minister disclosed further that as a result of the N26 difference in the current landing cost of N171 and pump price of N145, NNPC, which has been singularly importing the product at the volume of 25million litres per day since October last year, has been incurring losses of about N800- N900million daily, which in cumulative terms traslate to about N85.5billion till date.
He told the committee that government had mandated him and a committee to find ways out of the current logjam.

According to Kachikwu, ending the fuel scarcity which is still existing in most parts of country, requires emergency of about 18 months before the local refineries are knocked into shape. 
He offered three ways out of the problem. But, Baru blamed the fuel scarcity on factors ranging from diversion of the product from depots by tanker drivers to neighbouring countries where it sold between N300 to N400 per litre, to outright hoarding by unscrupulous marketers at home. According to him, the NNPC had, prior to the scarcity, 1.9billion litres in reserve.
The reserve, according to him, was however emptied as a result of panic buying arising from rumour earlier made on social media about price increase, the one-day strike embarked upon by PENGASSAN, hoarding and diversion by some dubious players in the sector.

But, 24 hours after Kachikwu had hinted that the landing cost of the Premium Motor Spirit (PMS) also known as petrol has risen to N171 and thus will demand either subsidy removal and hike in pump price to attract independed marketers to import the prpduct and sell at a profitable price, he made u-turn and denied that the federal government was planning to hike the fuel price.
A statement issued by Mr. Idang Alibi, the Director of Press in the ministry, clarified the minister’s submission made to the joint committee of the National Assembly on Petroleum Downstream.
“The Ministry of Petroleum Resources would like to categorically state that the minister never mentioned nor insinuated the need or plans by the Federal Government to increase the current pump price of Premium Motor Spirit (PMS),” Mr. Alibi said.
The minister’s denial of the new fuel pump regime, Blueprint Weekend learnt was not unconnected with pressures from the powers that be in the NNPC and the Ministry of Petroleum.
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