Fuel Price Hike: 4 Modular Refineries Will Soon Take Off — FG

By 08:39 Tue, 17 May 2016 Comments

— 16th May 2016
Federal Government will soon release the names of the four companies which successfully bided to operate Modular Refineries to enable them commence operation, according to Minister of Information and Culture, Alhaji Lai Mohammed, who disclosed on Monday while briefing journalist in Abuja as part of ongoing sensitization campaign on the deregulation of the down stream sector of the nation’s petroleum industry.

The minister assured that when fully operational, Nigeria will be able to refine 650,000 per day of petrol from the refineries while Dangote Refinery will also add 750,000 barrels per day, to make Nigeria net exporter of refined petroleum products.

The Minister who noted that federal government has meticulously followed the process for approving the bid winners, said the ventures will help create over 200,000 jobs as well as stimulate the economy.

Alhaji Mohammed who briefed in company of the Permanent Secretary of the Ministry and General Manager, Group Public Affairs of the Nigerian National Petroleum Corporation NNPC, Alhaji Garbadeen Mahammad, told newsmen that the NNPC was heading for bankruptcy because it became the sole importer of over 90 percent of petroleum products consumed by Nigerians shortly before the recent deregulation.

He disclosed that NNPC was spending about $550 Million and needed about $600m to continue fuel importation, before the current government intervention in the sector to save the firm from bankruptcy.

He disclosed further that the nation could not afford to open letters of credit for the fuel importers because of the dwindling income from crude oil

” We did not have enough foreign exchange to open letters of credit for people to import fuel” adding that ” We must never be pushed to a situation in which we are forced to subsidize fuel prices again in this country, because even if prices of crude oil improves, there are a lot of things we can do with the money to ameliorate the sufferings of our people”

Alhaji Mohammed who assured that the new regime will discourage petroleum products hoarding, product diversion and other unwholesome practices in the petroleum industry, also added that “We have no choice but to deregulate the price of petrol at the rate we were going”

He debunked insinuations that what government did was to remove subsidy from petroleum products adding that ” there was no subsidy in the first place”

” One Trillion Naira was paid out as subsidy last year, therefore, in the 2016 budget, government refused to make provision for subsidy”

On the gains expected from the current deregulation, he announced that government will create jobs for 370,000 technicians and Artisan, while 1.76 million unemployed small business operators were being targeted for loans and grants.

” They will access this loans through Cooperatives and loans will be access without collaterals. We are also going to commence the feeding 5m pupils in our public schools daily. This will create more opportunities in the agricultural sector”

He disclosed that there was no basic for comparisons with similar action embarked upon in 2012, adding that ” income from oil has fallen and there is drastic reduction in the foreign exchange available”

“From October last year, NNPC has been responsible for over 90% of fuel consumed, while 445,000 barrels was being exchanged for fuel by NNPC”

“Activities of Militants have further reduced government earnings and production volumes reduced to 1.65mbpd as against the projected 2.2Mbpd”

He also blamed the current travail on the activities of marketers who he said were buying petrol at N77 per Litre and sell higher to Nigerian neighbours.

He however assured that the DPR and PPPRAA will be empowered to provide a level playing ground for operators of the sector.

While appealing to the organized Labour to sheath their sword, the Minister declared that there can be salary increase at the moment as Nigeria was losing over 60% of its earnings, daily

The Minister who also spoke on the effect of the activities of the Niger Delta Avengers, appealed to the group to lay down their arms and embrace dialogue as the country is losing 1000 megawatts of electricity as well as over 500,000 barrels of crude oil daily.




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