We will not increase fuel price, Kachikwu says after meeting Buhari

After a closed door meeting with President Muhammadu Buhari, Nigeria’s Minister of State for Petroleum, Ibe Kachikwu, said the government has no plans to increase the price of petrol.

Mr. Kachikwu’s statement comes a day after former Group Managing Directors, GMDs, of the state oil firm, NNPC, advised the government to increase the price.

The former state oil chiefs argued that the current price cap of N145 per litre of petrol was “not congruent with the liberalization policy.”

The removal of the cap under a liberalised market environment would allow marketers of petroleum products to sell at a comfortable price based on factors such as the exchange rate and international crude price. With the Naira exchange rate going down by over 50 per cent to about N412 since the current petrol price was fixed, approving the recommendation would have meant Nigerians pay more for petrol.

While addressing journalists at the State House after meeting the President, Mr. Kachikwu indicated the government would not heed his predecessor’s advice.

The minister, who handed over as GMD of the NNPC to the current incumbent, Maikanti Baru, said the government had no plans to increase the price.

“Have you seen any memo to that effect?’’ he responded when pressed on the matter by journalists.
The minister was accompanied to the meeting with the president by Mr. Baru who also said the government has no plan to increase the price of petrol.

“There is nothing like that,” he said.

Both men referred journalists to the Petroleum Product Pricing and Regulatory Agency, PPPRA‎.

It was reported how the PPPRA also rejected the advice to increase fuel price.

While stating the government’s response, the acting Executive Secretary of PPPRA, Sotonye Iyoyo, said the proposal was the personal opinion of the former state oil chiefs.

“If it was a recommendation, that is what it is – a personal opinion. I’m not aware government is planning any fuel price increase. We are in a liberalised market already,” the acting Executive Secretary of PPPRA, Sotonye Iyoyo, said.

Buhari’s objection

Although the two oil chiefs did not provide details of their discussion with the president, the issue of petrol price is believed to be the main topic of discussion.

Mr. Buhari had been reluctant to increase the petrol price from N86 to N145 cap in May despite the hard biting scarcity of the product that left Nigerians queuing for days to get it. The scarcity persisted mainly because marketers refused to import the product saying it was not profitable to import and sell at N86.

The marketers have again called for an upward review of prices.

A senior official of the retail arm of the NNPC, who sought anonymity as he was not authorised to speak to journalists, narrated how the president conceded to the price increase only after so much pressure.

“Kachikwu threatened to resign if the president did not agree to the increase then” he said.

“I’m not sure the president will approve any such increase anymore, especially with the current economic situation,” he said in reference to Nigeria’s current economic recession that has seen tens of thousands of people lose their jobs, companies shut down, and states unable to pay salaries.