Buhari under fresh pressure to increase pump price of petrol


President Muhammadu Buhari has come under fresh pressures to increase the pump price of petrol from N145 per liter to N200.  National Daily gathered that the president is, however, restrained by the 2019 general elections from taking such action.

Special Adviser to the Minister of State for Petroleum Resources, Policy and Regulation, Tim Okon, at the All Convention Luncheon of the 36th Annual International Conference and Exhibition of the Nigerian Association of Petroleum Explorationists (NAPE) in Lagos on Tuesday argued that price cap on petrol is a major setback on attracting investors to help rehabilitate the country’s ailing refineries.

Okon, speaking on “Oil Price fluctuations in a Developing Economy and the Recipe for Economic Growth,” contended that, Section 6 of the Petroleum Act, which empowers the Minister of Petroleum Resources to fix prices for petroleum products, constitutes  a major factor investors will not find the refineries attractive for business.

The SA to the Minister of State contested that a situation whereby a private investor strives to raise fund to rehabilitate the refineries and get it working and Government on the other hand fixes petroleum products prices is not a workable model. Okon noted that banks providing loans to the investors would prefer to operate in a situation where they would have control over repayment schedule and terms and inflow, saying this would also include pricing for the product.

Okon stated: ‘‘But the moment Banks discovers that you don’t have control over pricing, there are huge chances that they would withdraw from such transaction because the possibility of recovering their funds over a certain period of time is already threatened from the outset.’’

He observed that the structure of the 650,000 barrels per day at the Dangote refinery would only serve as an export refinery, explaining that after paid entities have exported the product, and it would now be imported back into the country.

‘‘The plan of the refinery is not to refine Premium Motor Spirit (PMS) popularly called petrol and now sell at Government regulated price. That will not happen under the private refinery structure,’’ Okon declared.

Managing Director of Seplat Petroleum Plc, Austin Avuru, speaking on “Oil Price Volatility: Challenges, Strategies and Opportunities”, remarked that oil, coal and gas will still account for 40 per cent of the world  energy mix.

He was of the view that technology will continue to drive the future of oil, observing that supplementary volume of oil is coming on stream as a result of technology; else oil would have been about $200 per barrel.