•‘$100bn investments needed to revive oil sector’
Okechukwu Nnodim, Abuja
The queues for Premium Motor Spirit, popularly known as petrol,
in some parts of the country may not go away soon, the Minister of State for Petroleum Resources, Ibe Kachikwu, said on Thursday.
He, however, stated that a lot of work was being done by the Ministry of Petroleum Resources and the Nigerian National Petroleum Corporation to address the situation, adding that PMS importation burden on the NNPC was so much.
The minister, who spoke during the conclusion of the Nigeria International Petroleum Summit in Abuja, also stated that the country needed $100bn worth of investments in order to revive its oil and gas industry.
Responding to a question on how he intends to ensure that the petrol queues, which are gradually disappearing in Abuja and neighbouring states, did not reappear after the close of the NIPS, Kachikwu stated that he doubted if the situation had gone finally.
He said, “Even though I did tell the NNPC to make sure that there was no queue during this period, it should have been looked at literarily. It was basically saying that it’s gone on for a long time and you need to find a solution. The GMD has been very busy on a day-to-day basis and we are trying to implement whatever policies are in place currently to ensure that the queues do not come back. So I am sure we are going to continue to embed that policy.
“Has it gone away finally and for good? I don’t think so. I don’t think so in the sense that there are still a few things and there are importations taking place, there are reserves that are being rebuilt and so a bit of challenge. But I know what they’ve done is being able to manage the logistics angle very well.”
He added, “You also know that as we begin to trend into the late March period, the market dynamics change, products become slightly cheaper because of the summer and winter issues. So, what you might then have is that some marketers, who are on the fringes and who have efficiency levels, might begin to bring in a few cargoes themselves and supplement.
“But I’m hoping that before then, some of the resolutions that we have come to, which his Excellency is considering, would have been approved and it will give the NNPC a lot more leeway in terms of being able to address this issue. So I’m hoping it’s (petrol queues) not going to come back.”
The minister insisted that other marketers had to come into the business of petrol importation, as the burden was too much on the NNPC.
Kachikwu said, “It is critical that we bring back market players in terms of importation. It is too much of a burden to have the NNPC as the last supplier of the product to the country. It is not just something that can be achieved. They have done quite a lot of work this week, courtesy of the ultimatum that I gave, as they have succeeded in taking it out of Abuja.
“Not taking it out and resurfacing tomorrow, that is the issue we need to go and address. The endemic business model. The business model is that the landing price is higher than the sale price, and second is that we do not want to increase price. So, in between those two, we need to find things that enable us provide incentives to the private sector to come back to business.
“And it should be a short-term thing. Hopefully, it should be something that will last over the next 18 months, while the refineries are being re-kitted. But after that, if we still do not address the market fundamentals of the business, it will be like what you are suffering in power, whereby you have trapped 2,000MW of power that cannot be delivered because we have refused to pay the right price for power.”
He, however, observed that, “For now the directives we are working on is that no price increase because people are already going through a lot of groaning and difficult time. Obviously, the President is very concerned about that.”
On investments in the oil sector and where the government targets to get investors, Kachikwu stated that about $40bn worth of investments were being expected in Nigeria in few years’ time, but noted that the oil and gas sector needed $100bn investments to be revived.
He said, “I did mention that about $40bn investments are coming from three very unique projects: Egina, $15bn; the Bonga, which we are heading for FID is about $10bn; the Zabazaba is also about $12bn. We have investments that are coming into the downstream, to the refineries, which are invariable $2.5bn to $3bn, and the AKK pipeline is about $3bn.”
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