The Minister of State for Petroleum, Dr.
Ibe Kachikwu, appeared before the Senate Committee on Petroleum
Resources (Downstream) on Tuesday to give reasons for the acute fuel
scarcity across the country and the efforts being made by his ministry
to resolve the embarrassing situation.
He regretted the situation and
apologised to Nigerians, who he said were really going through difficult
moments, and promised that the scarcity would end on or before April 7.
Kachikwu said he would not resign from
his position as minister and instead asked those who were threatening to
stage a protest in Abuja to save their money because he took the
appointment to work for his fatherland.
The minister stated, “I will not resign.
I am here to do my job. Those who are planning to stage a protest
against me in Abuja should save their fuel money because I have a job to
do, and I am committed to doing it well.
“I share the pains of Nigerians. I feel
that pain every day. I walk the streets and those who are following my
trajectories since I resumed office would see that even on Christmas
day, I was at the refineries. On Easter Day, I was in Lagos monitoring
fuel distribution at the depots.
“I have given 24/7 attention to the
problems in this industry, which are unbelievable. I have continued to
work with one sole purpose in mind, which is that every problem will
have a solution.”
Kachikwu added, “I do apologise if a
comment I make jocularly with my friends in the press about not being a
magician offends some Nigerians; it wasn’t meant to be. It is a side
jocular issue and I did go ahead to explain what needed to be done. I
didn’t intend to create this kind of hyperbole that it did.
“Let me admit that I am not a typically
experienced politician. I am a technocrat. Some of the phraseologies
that I may use, while being acceptable in the arena in which I play,
obviously will not be acceptable in the public political arena. If
anybody’s sensitivities were offended by that, I totally apologise.”
He attributed the current petrol
scarcity to the refusal by the major oil marketers to import, diversion
of the product by marketers, pipeline vandalism, panic buying and
non-computerisation of the distribution network to monitor trucks.
The minister lamented that since the
payment of N600bn subsidy arrears, which the current administration
inherited from the administration of former President Goodluck Jonathan,
oil marketers had stopped fuel importation.
The development, he said, had forced the
Nigerian National Petroleum Corporation to overstretch its capacity,
human resources and facilities in order to bridge the gap, but that the
corporation lacked the immediate capacity to handle the task.
Kachikwu said, “Let me put the reasons
for the scarcity in three categories. First, when we came in August,
this country had arrears of unpaid subsidy claims that were in excess of
N600bn, which were not paid for over a year.
“Progressively, over a period of eight
months, prior to my coming on board, people had been staying away from
importation not at a heavy level, but by about 10 to 15 per cent of
allocations were not being met.
“There was hope that ultimately, if the
subsidy regime continued, they would get paid; so, some people continued
to import, but by the time we came in, people had reached a breaking
point and most of the companies didn’t have the liquidity even to go to
the banks and open letters of credit, and that became a major issue.”
He said it was obvious that having
cleared the N600bn subsidy claims, the country could no longer continue
with the subsidy regime owing to dwindling oil revenue and the fact that
monumental frauds were being uncovered in the system.
As of January 1 this year, the minister
stated that the country was no longer paying subsidy, saving a
cumulative amount of over N1tn in a one year period.
Kachikwu noted, “The second major issue
was that once the N600bn subsidy money was paid, the ability of the
marketers to import the product became a challenge, because they could
not raise letters of credit, and up to this point, that still remains a
major issue.
“So, even if they wanted to import, they
needed letters of credit and adequate foreign exchange cover. Some of
them were owing arrears of liabilities as a result of the commitment I
had made on petroleum importation.”
As part of efforts to ensure a lasting
solution to the problem, he stated that the nation was setting up for
the first time strategic reserves of about two million tonnes to provide
products always.
He said these would be operational as from May and would contain between five and seven cargos of fuel per reserve.
Kachikwu said, “Once we do that, we should be away from the incessant fuel crisis that we have.
We expect that between now and about the
6th to the 7th of April, the fuel queues will disappear, the DSDP will
begin and the foreign exchange allocation will see us smoothly through
the track.
“The refineries will be working and the
volumes they will be producing will be sent to the strategic reserves to
address difficult times. In April, we are expected to get 150 per cent
of the volumes that will be needed. A lot of that will go to storage
tanks. Hopefully, that should sort out the problem.”
He said privatisation of the refineries remained the best solution to end the fuel crisis in the country.
Sunday Aborisade, Abuja/ Punch
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