Petrol to sell below N87 from January – Minister

The Federal Government has disclosed that a new pump price of fuel would become effective on January 1, 2016.

This disclosure was made yesterday by the minister of state for petroleum, Dr. Emmanuel Ibe Kachikwu, at the Port Harcourt refinery shortly after taking a tour of the facility.

The minister stated that following the completion of an analysis taking into cognizance the current reality in the oil market, the new pump price would likely be either N85 or N86 from January 1, 2016.

Kachikwu, who stated that he signed off on the Petroleum Product Pricing Regulatory Agency (PPPRA) template Thursday, said marketers would be advised regarding the new price in a couple of days as the PPPRA would adjust its pricing template.

He said: “The new PPPRA template was signed off yesterday (Thursday), in the next couple of days marketers will be duly advised. Pricing is not a gimmick, we have to reflect these prices to reflect realities of crude market. The objective is two-fold, one we cannot afford to continue to subsidise when we can’t even understand where those subsidies are going to. There’s a lot of fraudulent element involved and we have to cut that off.

“Secondly, the earning capacity of government is deteriorating by the day due to lower prices of crude. So applying that, what we landed when we did our analysis for the first time was about N85 or N86, so it’s below N87.”

“Asked specifically when the new pump price will become effective, the minister said, “it will be more like 1st of January, 2016.”

Kachikwu also disclosed that having failed to reach their expected levels of operations, the Warri and Kaduna refineries would be producing on part time bases, while the government would seek for third party financers to fund them

Ruling out a possible sale of the refineries, the minister said, “My assessment today is that Kaduna is up. Port Harcourt is coming up, but not at the level where they would not need help. We will likely see both Warri and Kaduna, not shut down, but we are going to work for mechanisms whereby they can keep producing on a part time basis.