Minister of State for Petroleum Resources, Dr. Ibe Kachikwu on Thursday in Abuja disclosed that, the Federal Government may increase the price of Premium Motor Spirit (PMS), popularly called petrol to a minimum price of N180 anytime soon.
Dr. Ibe Kachikwu disclosed this during a presentation to a joint committee on Petroleum (Downstream) of the Senate and the House of Representatives on Thursday.
According to him, the Federal Government, through the Nigerian National Petroleum Corporation (NNPC) has been bearing the cost of N26 per litre, representing the difference between N171 and the current official price of N145 per litre.
He Insisted that independent marketers would not be able to import the product at the current foreign exchange rate since Naira presently exchanges for N365 per Dollar.
“We now have to go back and find the solution to this problem in order to ease supply gaps and ensure availability of the product at all times, the marketers were able to sell for N145 per litre when the exchange rate was N285 per Dollar.
Kachikwu, however, proffered three alternative solutions to pump price increase: getting the Central Bank of Nigeria (CBN) to introduce a modulated foreign exchange rate specifically for importers of the product; giving the marketers significant tax adjustments to enable them to absorb the high cost; and a plural pricing system whereby the NNPC would continue to sell at N145 through its numerous outlets while the marketers are allowed to fix their own price.
“Independent marketers would not be able to import the product at the current foreign exchange rate, saying the marketers were able to sell for N145 per litre when the exchange rate was N285 per Dollar. The Naira presently exchanges for N365 per Dollar.
“Rising prices in international market affecting domestic prices. What the country needs is to have the refineries working. It’s a shame that after 40 years, Nigeria cannot produce its domestic consumption.
“It would take 18 months to address problems of scarcity, price stability and other issues relating to the supply of petroleum products. The pipelines should be concessioned to allow private participation.
“There is huge infrastructure deficit in the system because the NNPC ought to be distributing products through their pipes but most of the pipes are damaged. The has necessitated the use of trucks to distribute the product across the country.
“Most importantly, fixing the refineries should be the lasting solution. To discuss and address the issues, we have to seek approval from the President,” the Minister said.
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