Ibe kachikwu, Minister of State for Petroleum Resources, says refineries of the Nigerian National Petroleum Corporation (NNPC) will become “scraps” by the time Dangote refinery comes on board.
Aliko Dangote, billionaire businessman, has projected that his refinery will commence operations in 2018.
Lamenting the way government-owned refineries were functioning, Kachikwu said no serious nation will run business in that manner and make profit.
He promised to work towards reducing the cost of crude production.
Kachikuwu spoke at the National Oil Policy and National Gas Policy consultative forum in Abuja on Thursday.
“These things should have been on ground yesterday. A lot of things happening in the industry for so long and they are being taken as a norm,” he said.
“We still produce crude at $27 a barrel and sell at $40. We have to bring it below $18. No serious nation will do that and make profit.
“Refineries will have to work. If time goes by and Dangote refinery begins, we’ll have scraps.”
Asked what happened to the 2008 Gas Master Plan, Kachikwu said: “If the gas master plan was that fantastic how come we don’t have changes in that sector?
“That means something is fundamentally wrong but I believe no work ever done in life is a waste.
“People who did the Gas Master Plan and the Petroleum Industry Bill did a huge work.
“Where we are headed is to try and free the industry so that it can do its own rule, set its own prices.
“There are few mechanics that we still have to get in place properly. We can forget the fact that we still have foreign exchange challenges; we can’t forget the fact that income to government is still very tight so you need to see how you balance that but what is important is: what is the objective?
“The objective is still to fully deregulate and we have started that process. It is a continuing process and we will continue fine-tuning it until we get to where we should be.”
A stakeholder at the event as saying Nigerians would have to embrace full deregulation one way or the other.
“It is inevitable. The PPMC is groaning. It is not making profit as it should because it bears the burden of importing and sometimes sells below cost price,” the individual, who preferred to be anonymous, reportedly said.
“You know if the president had his way, he would like to fix the price of the bread that we eat so it can be affordable for the common man.
“However, full deregulation of the downstream sector is important so that the market can determine prices which will be better for consumers in the long run.”