The Nigerian National Petroleum Corporation says it has achieved a 45 percent reduction in the quantity of petrol imported into the country.
Dr. Ibe Kachikwu, Minister of State for Petroleum Resources, said in a message he posted on his Facebook page on Saturday, that imports of Premium Motor Spirit was down from 95 percent to 50 percent.
The minister credited the petrol price modulation mechanism introduced by the government last May as the reason for the reduction in imports, which he says has triggered investments into the downstream sector of the oil industry. He noted that marketers have begun importation of PMS as a result of the development.
“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.
“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.”
The minister also said in his message that the federal government had stopped paying subsidy to oil marketers, noting that there were still some challenges in the downstream sector in spite of this.
“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.”
The minister also said that the time has come for Nigerians to start looking towards using alternative and cleaner sources of energy instead of fossil fuel.
“The reality is that all over the world everybody is moving to cleaner fossils. LPG provides that for us, gas does the same for us. So we need to begin to look at how we can install pipelines for LPG and take it to places of its consumption, where we can have vehicles that have the capability to potentially use gas in order to reduce PMS usage.”