The Minister for State for Petroleum, Dr Ibe Kachikwu, has rebuffed claims that the Government is about to increase the pump price of petrol .
Rumours have it that the Government might be considering an increase to reflect current exchange rate. Industry sources, opine fuel importers currently pay N280 /$1 as exchange rate, which is not cost reflective.
However, Dr kachikwu has attempted to rebuff the claims. Here is what he said recently at an event organized by Pengassan.
“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. “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; making sure that the template is respected. “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,”
Whilst this may sound like a denial of an attempt to increase fuel price, he certainly did suggest that a review could be in the works. For example, by admitting that the exchange rate is indeed a factor he has conceded that a change in the template will mean an adjustment in that regard. It is also obvious that his plans to mitigate a review based on the current exchange rate, might be to force the likes of NPA who still charge in dollars to charge in Naira.
