The recent increase in fuel pump price by N4 in Nigerian National Petroleum Corporation (NNPC) filling stations has been criticized by Dr Ibe Kachikwu, the country’s minister of state for petroleum resources.
He criticized the increase after receiving award at an event organized by the Petroleum Products Pricing Regulatory Agency (PPPRA) in Abuja on Sunday,November 6,2016.
NNPC had been selling fuel at N141 but on November 1 increased it by N4 to the government benchmark of N145.
Reacting, Kachikwu said, “It is obviously humbling and too early in the day to receive an award and to be recognised so soon in some of the things we are trying to do. It is humbling, I thank them very much.”
“First, I am not aware that the NNPC has increased price. I need to look into that.”
“It is a bit of surprise for me, because there are processes in doing this, if they have done that, it means they are doing it wrongly.”
Kachikwu, however, noted that the increase could be as a result of foreign exchange differentiation.
He explained that there were areas within government controlled aspects like payments to the Ministry of Transport and the Nigerian Ports Authority that were foreign currency denominated.
”Having said that, the reality is that what we did at the point where we did some liberalisation, was to enable the free market float the price.
”Obviously, as you look at foreign exchange differentiation and all that, it would impact. The worst thing you could do is to go back to an era where we basically were fixing prices.”
“What we ought to be doing was watching the prices, making sure that they are not taking advantage of the common man; making sure that the template is respected.”
“One of the things I think we had hoped to do, which we should still do, before we embark on any price increase is to work on those templates.”
“Those who are investing must be able to predict the pricing methodologies, the pricing consequences and the actions, to be able to justify their investments.
“At the end of the day, I think PPPRA is the one that has the authority to say it is time.
“Otherwise, you have a crisis of individual decisions on pricing”, he said.
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