Ibe Kachikwu, minister of state for petroleum resources, says the federal government will review its current pricing template before it can implement any increase in fuel price.
The minister explained that some of the elements of the pricing template still lies within the government’s control, and can be amended to keep retail prices within its current band.
Speaking in Abuja over the weekend, Kachikwu said he was not aware that Nigerian National Petroleum Corporation (NNPC) mega-stations had increased their pump price of petrol to N145 per litre, from N141.
“First, I am not aware that the NNPC has increased its price. I need to look into that, it’s a bit of surprise for me, because there are processes in doing this,” he said.
“If they have done that, it means they are doing it wrongly. Let me find out what the facts are. Having said that, the reality is that what we did at the point where we did some liberalisation was to enable the market float the price.
“Obviously, as you look at foreign exchange differentiations and all that, it would impact the landing cost of petrol.
“The worst thing you could do is to go back to the era where we basically were fixing prices. What we ought to be doing is watching prices, making sure that they are not taking advantage of the common man.”
Currently, NPA, NIMASA charge N1.06 on every litre of petrol coming into Nigeria, but Kachikwu suggested that the government would rather cut its own charges in the template first, before embarking on any increase.
“One of the things I think we had hoped to do, which we should still do before we embark on any price increase is to work on those templates. There are still areas that are within government control.
“These are payments to the Ministry of Transport and the rest, payments to the Nigerian Ports Authority (NPA) that are foreign-currency denominated.
“We are working on the possibility of being able to shift that out so that you still can modulate the prices within where it is right now. But I would hold a conversation with the industry and see how it is going.”
“At the end of the day, I think PPPRA is the agency that has the authority to say it is time the templates does justify some level of movement, otherwise you have a crisis of individual decisions on pricing.”