Business

Kachickwu overules self on price of petrol, subsidy

By Timothy Enietan-Matthews

In what appears as a dramatic volte face, the Minister of State for Petroleum, Dr. Emmanuel Ibe-Kachukwu, Sunday, tactically denied his widely reported statement on the reduction of the pump price of petrol and the removal of the Petroleum Subsidy Fund, widely reffered to on as petrol subsidy.

Kachikwu, who had said petrol would start selling for N85 from January while speaking with reporters in Port Harcourt a few day ago, however claimed in Kaduna on Sunday that government would announce the new price regime in January while also hinting that President Muhammadu Buhari prefers to keep it at N87. He also said that there was no subsidy in the price of the Premium Motor Spirit (PMS) even with the current price regime of N87.

The minister, who is also the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), spoke to reporters after inspecting the Kaduna Refining and Petrochemical Company (KRPC) in Kaduna.

Pressed to be categorical on whether subsidy has been removed or not since there is no provision for it in next year’s budget, the minister said: “Today, there is no subsidy; we are selling products at N87. In January, we will look at what the trend is, we will announce prices. If that is less than N87, we will announce it and if it is more than that, we will have to announce it. “

According to Kachikwu, what is important is not the removal or otherwise of the subsidy but the huge amount government spends on it, adding that despite the huge fund, no one had been able to account for it due to the corruption in the management of the fund.

He said : “I don’t want to get caught into this subsidy or no subsidy; money provided in the budget or not.

“I think what is critical is two-fold: one is that the amount that we spent in the past on providing what you might call monetary subsidy is huge, we have never been able to account for it and the amount of corruption there nobody has been able to account.”

According to the minister, Nigerians were dissipating too much energy discussing if the government should continue to fund the funding gap called subsidy, which runs into N1 trillion.

Read also: Amidst scarcity, petrol to sell for N85 from Jan 1

He said: “First, let me say that we are expending too much energy on semantics. There are two critical issues here; one is, should the Federal Government continue to fund the gap that we see, this huge one trillion naira, and I think everybody is on the same page that as much as it is we need to get out of it.”

“Where we have a disagreement is if we get out of it, should we sell products at certain price or should you let free markets to roll in so that you can skyrocket prices?”

The minister added that President Muhammadu Buhari had said that the price of petrol should remain N87 per litre for now, approved that the government should review the market and make the necessary adjustment in line with the dictates of the market.

“The President is very emphatic on this; he says, for now, he expects that products should be about N87. He has also given approval for us to be able to look at market trends and make adjustments as need be. So, when you keep asking me if subsidy has been removed, I ask what is subsidy?.

“At today’s price, there is no subsidy and that is why I have gone away from the use of the word ‘subsidy’ and have continuously said that I am more on the page of price modulation. How do we look to fluctuate the market to reflect market dynamics.”

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