The members of the lower legislative chamber are angry with the Minister of Petroleum Resources, Ibe Kachikwu over what they described as the arbitrary pricing of petroleum products in the country.
The House of Representatives had specifically requested explanation from the federal government on the rationale behind its importation of 95 percent of the nation’s consumption requirement of Premium Motor Spirit (PMS) petrol while leaving five percent to the private sector.
This is as the Minister of Petroleum Resources, Ibe Kachikwu restated the 2019 total exit date for importation of petrol with the refurbishment of three refineries to aid the process.
Kachikwu said 100 percent refining of crude oil will reduce the foreign exchange allocation by 30 percent.
While addressing members of the Ad hoc Committee investigating review of PMS price, Kachikwu said Nigeria cannot afford to be left behind by global trend whereby countries are exiting sale (export) of crude oil but concentrating on refining and selling.
He told the committee that it was along this line that the federal government is determined to ensure that the country exit subsidy in downstream sector of the petroleum industry.
He however regretted that the gains so far recorded in the deregulation of some petroleum products are being affected by pricing of the product.
He said: “What you see a lot of countries do is that people are moving away from selling crude, they are moving to refining their products and selling out the refined products, whether it is white product, whether it is diesel, whether it is black product and the rest. So people are moving away from this crude exportation.
“What this mean for me is that the demand for investment in the downstream refining and processing facilities are going to be high and the investment capitals are going to be challenged and you are going to have to compete with the rest of the world who been initially been crude exporters.
“Products that have been largely deregulated like kerosene, how has that performed? Our performance on the deregulated products is commendable but there’s still a struggle because of volatility and access of forex.
“As a result, we have to move away from price parity to look more into cost-based pricing structure.
“The pricing structure has created fears for investors and that is why there is a need to avoid what is happening to gas where operators export and leave local market (consumption) struggling.”
Chairman of the Ad-hoc Committee, Nnanna Igbokwe (PDP, Imo) expressed concern over the structure of importation of petrol asking why only five percent of the country’s consumption requirement was allocated to private sector participants.
“In the interim, while making steps to enhance supply of PMS through oil production and shore-up supply of PMS through the Direct Supply Direct Purchase, you need to guide against sabotage of good government’s programmes,” Igbokwe said.
The Committee is set to visit Nigeria’s neighbouring countries with a view of assessing their petrol prices, among others.