FG reverses petrol subsidy; as Kaduna refinery set to resume operations

The Federal Government, Saturday, has reversed its policy on non-payment of subsidy on petrol as it subsidised the commodity by N5.84 for every litre of premium motor spirit (PMS) consumed in Nigeria.
Figures from the latest pricing templates of the Petroleum Products Pricing Regulatory Agency released on Saturday showed that the Federal Government was paying N5.84 as subsidy on every litre of petrol sold at non-NNPC filling stations.
This is also as authorities at the Kaduna refinery have assured that the plant will resume operations in two weeks.
The PPPRA is the agency of the Federal Government that regulates the prices of white products – petrol and kerosene – across the country.
According to the agency, the Expected Open Market Price of petrol for non-NNPC stations as at April 2, 2016 was N92.34 per litre, against an official pump price of N86.5 per litre, leaving an under-recovery or subsidy of N5.84 per litre.
Similarly, the template for NNPC-run stations showed that the government was paying N5.80 per litre as subsidy, as the EOMP for outlets in this category was N91.80 per litre as against an official rate of N86 per litre.
The EOMP is the actual cost of petrol without subsidy and comprises of the landing cost of the product as well as its subtotal margins like transporters charge, admin fee, dealers cost, bridging fund, and others.
On the retained pump price of petrol, the Acting Executive Secretary, PPPRA, Mrs. Sotonye Iyoyo, said: “The agency is retaining the retail prices of N86.00 for the NNPC, and N86.50 for the other marketing companies. The pump price of household kerosene also remains unchanged from what it was in the last quarter.
“Therefore, marketers are advised to ensure that there is no price distortion in their respective retail outlets. PPPRA, however, shall continue to monitor the global oil market performances, and come up, at appropriate time, with reasonable changes consistent with the newly-adopted price modulation principles.”
On news making the rounds that the agency was planning to increase the petrol price, Iyoyo urged members of the public to ignore such rumour, as prevailing market indicators do not support such.
She also called on motorists to desist from panic-buying, stressing: “PPPRA was working hard with other sister-organisations to ensure that the current supply and distribution challenges were resolved within the coming days.”
Meanwhile, the agency stated that it had released the second quarter allocations for the supply of petrol, based on the approval of the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu.
It said: “In the latest release, the apex national oil company, the NNPC, has 41.74 per cent of the total allocation, while the rest of the oil marketing companies got a total allocation of 58.27 per cent.”
Upstream Chief Operating Officer, Nigerian National Petroleum Corporation (NNPC), Mr Bello Rabiu-Babura, has assured that the Kaduna Refining and Petrochemical Company (KRPC) will resume production in two weeks’ time.
Rabiu-Babura gave the indication while fielding questions from energy correspondents, shortly after he inspected facilities at the Kaduna Refining and Petrochemical Company (KRPC) on Saturday in Kaduna.
He said that all the three refineries, Warri, Port Harcourt and Kaduna would resume refining crude oil for local consumption by the end of April to address the current scarcity.
“The Kaduna Refinery will resume in two weeks’ time as part of efforts to end the lingering fuel scarcity being experienced in the country,“ he said.
According to him, local crude refining at the KRPC would address the scarcity being experienced, especially in the Northern region.
“With what I have seen and the current effort of the Minister of State for Petroleum and the NNPC, all necessary arrangements are being put in place to ensure that the company resumes production.
“We are optimistic that in the next two weeks the refinery will resume production, and by the end of April all the other three refineries in the country will resume full production,“ he added.
Rabiu-Babura, who doubles as the Group Executive Director (GED) Upstream, said that the Federal Government and the NNPC in particular were working round the clock to end the fuel scarcity.
The official expressed satisfaction with the various ongoing facility upgrades at the KRPC capable of producing 110 barrels of fuel per day at full capacity.
The official commended the company’s management for the work being executed at the site.
He said the NNPC was also collaborating with security agencies to address pipelines vandalism.
“The corporation is working hand in hand with the Defence Headquarters and other agencies to ensure adequate security is provided at all pipelines.
“For the past 10 years our refineries have not been operating near optimum level. We can only put the entire operation at 22 per cent“ he said.

Rabiu-Babura, however, assured of the present administration’s determination to provide security at the facilities to boost crude refining for local consumption.