Following the crash in the price of crude oil in the international market and public expectations that the condition should translate to a downward review in the price of refined petroleum products, the Federal Government has commenced negotiations with petroleum product marketers and other relevant stakeholders with a view to coming up with a new price regime for petroleum products in Nigeria.
Minister of Petroleum Res-ources, Dr. Rilwanu Lukman, disclosed this yesterday on a visit to the National Assembly – despite earlier denials of such moves by government officials.
Lukman acknowledged that the slide in the price of crude oil had indeed led to a shift in the price of refined products as well as a reduction in the landing cost for imported premium motor spirit.
He, however, said while discussions were on, no consensus had been reached on the issue of price review.
According to him, the Petroleum Support Fund (PSF) provides the mechanism to deal with the issue and gave assurance that the right thing would be done on the matter.
He declined comments on the observation that there was no provision for the usual petroleum subsidy in the 2009 Appropriation Bill currently before the National Assembly.
“We are still discussing. The Petroleum Support Fund provides for how to deal with that issue and that is what we are working on now,” he said.
THISDAY had last month quoted the Special Adviser to the President on Petroleum, Dr. Emmanuel Egbogah, as saying the prices of petroleum products would be reduced by not less 25 per cent, but the Group General Manager (Public Affairs) of the Nigeria National Petroleum Corporation (NNPC), Levi Ajuonuma, had denied the story, saying no such decision had been taken.
Egbogah had also said the reduction would gradually move from 25 per cent to 40 per cent to reflect the spate of the current fall in global prices of oil.
But Ajuonuma said Egboga was quoted out of context, maintaining that “since the Federal Government has subsidised the pump price heavily recently, the government is not in a hurry to tinker with the current domestic pump price. The subsidy has always been very heavy on the government, costing at times N500 million in one month. Any way the government can recover a little bit of the subsidy cost in view of the global market price of the crude, will be welcome.”
Yesterday, Lukman also made a case for the funding of the multi-million dollar Trans-Sahara Gas Pipeline.
Addressing the House of Representatives Committee on Petroleum (Upstream), the Minister said the project had been on the drawing board for over 20 years owing to the low price of gas and the low demand for the product.
He said that all those limitations had changed over time and Nigeria needed to invest in projects that would help the country benefit maximally from her gas resources.
The time had come, Lukman said, for Nigeria to exploit her gas potentials and utilise its gas resources to enable her earn as much revenue from it as it is earning from oil.
The Trans-Sahara Gas Pipeline, a 3000km pipeline, will run from Calabar, Cross River State, stretching through Umuahia, Enugu to Ajaokuta. The second phase of the project will link Ajaokuta through Abuja to Kaduna and Kano while the third phase will move gas from Kano through Niger Republic to Algeria.
The project, which is at its infant stage, will involve feasibility studies, environmental impact assessment and detailed economic analysis to ascertain the viability of the entire project.
In the short run, the project will assist Nigeria in moving its gas from the South to the Northern parts of the country to ensure that industries that need the resource have access to it.
Lukman said that without prejudice to the feasibility studies, the gas pipeline is expected to be up to 56 inches in diameter as this will enable it transport as much gas as possible, not just to meet local consumption but also for export.
Jan72009