No Plans To Increase Fuel Price – FG

The Federal Government said, yesterday, that it had no plans to increase the pump price of Premium Motor Spirit, PMS, popularly known as petrol from the prevailing pump price of N97 per litre, describing the growing fear of imminent price hike as unfounded.

Equally, what appeared to be a major change in policy, the Federal Government, yesterday, said it has no plans to sell any of the country’s refineries.

Special Adviser to the President on Media and Publicity, Dr Reuben Abati, who spoke on the issue, also said that if selling the refineries was the basis for the plan by the junior oil workers to embark on strike, then the action would be fruitless.

Pump price

Dispelling fears of pump price hike, the Department of Petroleum Resources, DPR, said in a statement that all its offices nationwide had stepped up surveillance and monitoring of all products retail outlets to ensure and enforce compliance, stressing that all defaulters will be sanctioned in accordance with the law.

DPR reiterated that all petroleum product marketers must continue to sell at government approved prices.

It said: “The DPR wishes to inform the general public that the Federal Government of Nigeria has not and does not intend to increase petroleum product prices contrary to speculations by some members of the public.

“Consequently, all petroleum product marketers are hereby advised to sell at government approved prices and desist from hoarding, thereby causing artificial scarcity and hardship to consumers.

“The DPR wishes to reiterate that there is adequate supply of petroleum products nationwide.

“Meanwhile, all DPR offices nationwide have stepped up surveillance and monitoring of all products retail outlets to ensure and enforce compliance. All defaulters will be sanctioned in accordance with the law.”

Similarly, the Permanent Secretary, Federal Ministry of Petroleum Resources, Mr. Danladi Kifasi, appealed to oil marketers to refrain from hoarding of petroleum products, and the general public from panic buying in anticipation of any increase in pump price.

Kifasi further warned petroleum product marketers to desist from creating any scarcity so as to induce panic in the system  to exploit unsuspecting members of the public.

The NUPENG and the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, had earlier threatened to embark on a nationwide strike effective yesterday (January 2, 2014), to protest sale of the nation’s refineries.

However, the two unions decided to shelve the plan to allow for talks with officials of the ministries of Petroleum and Labour, on the issue, scheduled to hold on January 7, according to PENGASSAN’s President, Mr. Babatunde Ogun.

No selling of refineries

This would be the second time government would reverse its decision to sell the four national refineries with combined capacity of 445,000 barrels per day, even as combined refining capacity is now below 30 per cent.

The late President Umaru Musa Yar’Adua’s government reversed the sale of two of the refineries to some Nigerian billionaires by his predecessor, former President Olusegun Obasanjo.

This time, government, due to alleged apprehension over labour crises, did not even get as far as putting up the refineries for sale, as the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, had promised to embark on work to rule, if government proceeded with the plan.

However, Abati’s position contrasted sharply with that of the Minister of Petroleum Resources, Mrs Deziani Alison-Madueke, who said in an interview with Bloomberg TV Africa in London that the refineries would be sold.

“We would like to see major infrastructure entities, such as refineries, moving out of government hands into the private sector. Government does not want to be in the business of running major infrastructure entities and we haven’t done a very good job at it over the years,” she said.

But according to Abati: “Government is not going to sell any refineries. There is no such plan, and there is no presidential approval for such. Nobody, not even the Minister of Petroleum has powers to sell any government’s property.”

He then noted that if the proposed strike by oil workers was because of allegations that government plans to sell refineries, then they should sheathe their swords.

In anticipation of the sale of the refineries, some Nigerians had expected possible increase in the pump price of petrol and other products, leading to panic buying and hoarding in some locations across the country.

Earlier, the Ministry of Petroleum Resources and the industry regulator, the DPR, had allayed fears, saying there are no such plans, while warning oil marketers against any sharp practices.

A presidential audit of the country’s refineries led by a former Minister of Finance, Dr. Kalu Idika Kalu, had recommended the sale of the refineries due to inadequate government funding and “sub-optimal performance.”

The proposed sale of the refineries, located in Warri, Kaduna and Port Harcourt, had attracted wide support and commendations. Specifically, the major oil marketers descried the decision as the best thing, as long as the process was free and fair, given their very poor state.

Refining capacity

The Nigerian National Petroleum Corporation, NNPC, disclosed that each of the three refineries in the country was producing below 30 per cent installed capacity utilisation.

The NNPC, in its 2013 Third Quarter Petroleum Information, put the average capacity utilisation of the Kaduna, Port Harcourt, and Warri refineries at 29.71 per cent, 4.42 per cent and 28.87 per cent respectively, in the third quarter of 2013.

This is a far cry from the figure put forward by the NNPC towards the middle of last year, where it said the Kaduna Refinery was running at 65 per cent installed capacity, while the Warri refinery was producing at 63 per cent and the Port Harcourt Refinery producing at 66 per cent of installed capacity.

This may have necessitated the Federal Government’s decision to privatise the refineries, by selling them off to private investors to manage.

The planned sale of the refineries commenced last month with the setting up of the Steering Committee, headed by the Minister of Petroleum Resources. The Federal Government also set a time frame of 18 months for the conclusion of the privatisation process.

The NNPC, in the Third Quarter Petroleum Information, declared that in the period under review, a total of 1.496 million metric tonnes, MT, of crude oil/condensate was pumped to the three refineries for processing, out of which the refineries were able to process 970,000MT.

The NNPC said: “In third quarter 2013, about 1,242 MT of dry crude oil/condensate was pumped to the three refineries — Kaduna Refining and Petrochemical Company, KRPC, Port Harcourt Refining Company, PHRC and Warri Refining and Petrochemical Company, WRPC.”
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