Business Hilights

Tracking Nigeria's Headline Business News Online

Dan K1

Fuel Imports in 2019: Kachukwu dumps resignation, votes subsidy, imports

Ad 2
Ad 3

During the BBC’s HardTalk TV Programme hosted by Stephen Sackur on May 23, 2017, the Minister of State for Petroleum, Dr Ibe Kachukwu sworn that “I will resign if Nigeria still imports petrol in 2019.”
However, more than three months into 2019 with jumping fuel importation and growing fears of subsidy induced fuel scarcity plus debts, rather than throwing in the towel as sworn on international TV, the minister resorted to advising the presidency on how to manage rising importation due to soaring daily consumption of fuel.
The Minister in 2017, had boosted that Nigeria would stop importing refined petroleum products in 2019, noting that the country “must process rather than ship out oil,” insisting that he would walk away from his job if the 2019 target, which he set for himself, is not achieved.
“2019 is the target time…I target 2019. If I don’t achieve it, I will walk…I put the date and I will achieve it,” the minister told BBC’s Stephen Sackur on ‘Hardtalk’.
Analysts are bringing the comic angle to the his 2017 boost, saying for the fact he did not give details on how and the particular day or month he would have to resign in 2019, he actually had May 29 in mind having known that none of the current minister including him would make the next cabinet whether President Muhammadu Buhari won or not.
However, part of his plans that compelled him to make the pledge include what he called reshaping the almost ‘comatose’ refineries, construction of a new refinery, for which an MoU has been signed, but nothing to show for them till date.
Otherwise, Business Hilights fact checks revealed that in more than one year, four months and six days of his resignation pledge, repair works only started in one of the four refineries and the so called MoU on new refinery had gone off the radar.
Giving some rare insights on a national TV talk programme earlier last week, Dr Ibe Kachikwu said he is going to advise Mr President on how to resolve issues bordering on jumping fuel subsidy payment and never made mention of resigning his position based on the promise he made in 2017.
Rather he revealed that the import landing cost of fuel now is N180 which is N35 higher than the pump price of N145 per litre, an indication that the federal government is currently hemorrhaging on subsidy payment without any end in sight.
Continuing on managing and working towards removing subsidy, Dr Kachukwu recalled that in 2016, the government wrote to the Nigeria Labour Congress and all the trade unions, adding that meetings were held with the security apparatus.
According to him, “Even when there was a consensus on how we were going to do it, we still had an issue at the very tail end of the moment; NUPENG and PENGASSAN supported but, of course, the other members of the trade unions pulled out.
“Eventually, thankfully, Nigerians saw through what we were trying to do and let it happen. And thank God that happened at the time because when you look at the gap today, the landing cost is about N180 per litre and sale price is N145. Imagine if it (pump price) was N90-something; we will literally be a bankrupt country.”
“The point I am making is that anything you are going to do on subsidy requires a very efficient management of information – getting everybody who are stakeholders to tie into it.
“Should we deal with the removal of subsidy? I was gung-ho when I assumed this position that there was no way I was going to tolerate a subsidy regime at the time in 2015 of about N1.2tn-N1.3tn. There was just no way; we didn’t have the capacity to continue to pay.”
“So, I convinced the President that this needed to happen; thankfully, he listened, he agreed and we did. Now, we then had over-recovery period for quite a while and then we went into this upswing in prices that has now taken us again into under-recovery,” the minister noted.

Business Hilights is an online news channel conceptualized and structured to report and track on a daily basis; latest developments in critical business sectors to serve as a one stop news gateway for governments, foreign and indigenous investors.