by Azeez Adeniyi
The Nigerian National Petroleum Corporation (NNPC) has reduced its importation petroleum from about 95 per cent to 50 per cent.
The Minister of State for Petroleum Resources, Ibe Kachikwu said this in a podcast message posted on his Facebook page on Saturday.
Kachikwu said the reduction has led to massive investments in the downstream oil sector.
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Kachikwu said, “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.
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He added, “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.”
He said the downstream oil sector has continued to encounter challenges, even without oil scarcity.
Kachikwu said, “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.”
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