The Nigerian National Petroleum Corporation (NNPC) has
reduced its importation petroleum from about 95 per cent to 50 per cent.
The Minister of State for Petroleum Resources, Ibe Kachikwu
said this in a podcast message posted on his Facebook page on Saturday.
Kachikwu said the reduction has led to massive investments
in the downstream oil sector.
Kachikwu said, “First we’ve moved from a fully subsidy
based sector to a partially liberalised sector. I say partially because we
haven’t quite achieved the template to have a fully liberalised sector. What
that has done for us is that it has reduced consumption from 50 million litres
to 37 million litres a day.
“Some of that figures are fraud-based, others are potential
diversion numbers, but what is happening now is that the effect of our response
curbed the appetite for consumption and left us with a much more robust
reserve.
“In addition, the pricing governance, which was a modulating
concept, enabled us to come closer to what the realities of pricing were and so
this enabled marketers to jump back into the business and continue to massively
import.
He added, “So what you find over a period of between
when we introduced this measure (in May 2016) till towards the end of last
year, was that the NNPC reduced its importation profile from supplying about 90
to 95 per cent of the market to about 50 per cent, which was massive, providing
jobs, activity, investment and stability.”
He said the downstream oil sector has continued to encounter
challenges, even without oil scarcity.
Kachikwu said, “There isn’t fuel scarcity, we are not short
of products, but yet the downstream and midstream sectors continue to remain
challenged. And what we are going to do is to analyse what we have done so far
and begin to throw solutions to some of these challenges.
“When we first moved in, we had refineries that were not
producing, fuel subsidy issues of almost N15bn monthly expenses, massive
diversion of petroleum products across borders. We are consuming about 50
million litres of products at the time, but that substantially has reduced now.
“We had issues of pricing efficiency and governance, for at
that time the prices we were selling at were so ridiculously below what the
sustainable prices are. And you find a situation where basically marketers
disappeared from the industry. So we had massive shortages, queues and
everything seemed to be breaking down. We’ve since come out from that.”
By Azeez Adeniyi
