Kachikwu also announced Nigeria’s backing of Saudi Arabia and Russia in freezing oil production, while giving Iran and Iraq a way out to regain some of their lost market shares due to sanctions and war.
The minister said he supported a production freeze in an interview with reporters in Doha, Qatar on Sunday, according to a report by Bloomberg.
Kachikwu stated that Nigeria’s oil production would be 2.2 million barrels a day this month, unchanged from January, he said.
“Nigeria will continue to look at the possibility of increasing production, not to sell it, because we have local consumption that is essential for us. Right now, we are not even exporting the quantity that OPEC has given us,” he said, adding that demand from domestic refineries was at least 500,000 barrels of crude oil a day.
On Nigeria’s backing of a freeze in oil production, Kachikwu said, “Countries like Iran and Iraq have been out of the market for a while, and if they are to come back, you shouldn’t freeze them out where they are; you should freeze them at a higher level. By June, we will come very close to tightening the market.”
Saudi Arabia, Russia, Venezuela and Qatar agreed last week to keep production at January levels, as long as others followed suit, in an effort to revive prices from a 12-year low.
Iran’s production has slumped since international sanctions were imposed on its exports, and Iraq is seeking to rebuild following years of war and underinvestment.
Kachikwu noted that there was little chance that the Organisation of Petroleum Exporting Countries would hold an emergency meeting before the next regular one scheduled for June.
He said, “Rather than focus on an emergency meeting, we need to talk more. Because if you held a meeting when you haven’t agreed largely on the solution, it wouldn’t be productive and would also affect the price of oil.”
In another development, the NNPC said it was not recruiting and called on members of the public to be wary of fraudsters sending letters to unsuspecting individuals inviting them for “the second process of recruitment” billed to hold towards the end of this month.
Meanwhile, the Petroleum Products Pricing Regulatory Agency (PPPRA) has disclosed plans by the Federal Government to collect N8 per litre as subsidy on petrol imported by NNPC and other marketers.
Alhaji Farouk Ahmed, outgoing Executive Secretary of the Agency, announced this while handing over to Mr Moses Mbaba, General Manager Administration, and Human Resources, last week in Abuja.
Ahmed is among the heads of government agencies that were disengaged and asked to hand over to most senior directors in the office.
“The subsidy as at today came down to minus N8 per litre for PMS.
“ What I mean by minus N8 is that government now will collect N8 for every litre imported by NNPC and marketers as against payment to marketers and NNPC,’’ he said.
He said that at the close of work on February 16, the subsidy on petrol was N13.81k, adding that the landing cost was lower than the selling price by N13.81k.
According to him, it translates to what is called over recovery.
Ahmed said that an Over Recovery Account had been opened with the Central Bank of Nigeria on Feb. 3 and would be managed by the Office of the Accountant General of the Federation.
He said currently, about N2.6 billion had been lodged into the account with the December importation by NNPC and the marketers.
“This is just the beginning because some of products just arrived in December; that’s why the subsidy over recovery is low.
“But for those cargo that are loaded in January for example, we want the over recovery to start manifesting; then by calculation, we will begin to know what the price will be for marketers and NNPC respectively,’’ he said.
Commenting on review of template for price modulation in the first quarter, he said the agency was building data which it would analyse at the appropriate time.
He said that the data would look at the trend and analyse how the market had fared in the last two and half months.
He added that the agency would also check what the over recovery accumulated into before advising the minister.
He said that stakeholders in the sector would meet next week to deliberate on the development which would form part of the decision on the price going forward.
He noted that the price modulation review had some challenges but had led to the over recovery witnessed in the sector.
“There are a lot of things and that’s why we are into over recovery because first of all, we looked at the pricing after we reviewed the template.
“The review instilled some efficiency and cost savings and that cost savings translated into reduction of pump price even though it is 50k and N1 but it is an indication that something is working.
“That is the whole essence of modulation; cut cost; be more efficient and let Nigeria enjoy the benefit of that efficiency,’’ he said.
He expressed the hope that with over recovery, there might be price reduction on PMS in March after the review of the template.
He called on the staff to support the incoming leadership of the agency and advised his predecessor to continue with the legacy established by the agency to ensure positive change.
