The Minister of state for Petroleum Resources, Dr. Ibe Kachikwu has pointed out that the administration of President Muhammadu Buhari is not as advantaged as the immediate past administration of Goodluck Jonathan which had money to fund fuel subsidy.
Speaking before the House of Representatives on Monday, Kachikwu clarified that the current hike in the pump price of petrol was different from that which the Jonathan administration executed in 2012, stressing that the present administration is suffering from “non-availability of foreign exchange to import petroleum products.”
According to him, “the average price of crude oil then was valued at $110 per barrel and there was availability of funds to cater for the subsidy regime due to booming oil prices.
“Importation was based on 50 per cent financing from NNPC and 50% from oil marketers, while sourcing of foreign exchange for importation of petroleum products for both the NNPC and oil marketers was solely from the Central Bank of Nigeria and at official government rates.
“Presently, financing for importation of products is almost 100 per cent handled by NNPC and this model is unsustainable.”
Kachikwu said the average price of crude oil is valued at $40 per barrel, emphasising “lack of funds to cater for the subsidy regime owing to low crude prices.”
“Marketers have drastically reduced their importation since Q3 2015 due to a scarcity of forex. There is a need for them to source forex independent of CBN to be able to meet the nation’s demand,” he said.
The minister maintained that his team has “ongoing strategic plans and investments already on ground to ramp the country’s refineries to attract investors and in the long term become a net exporter of petroleum product.”