New fuel price regime to encourage $3b investments in refineries in 2016 – FG

The Federal Ministry of Petroleum Resources coarsely Tuesday said the add-on price regime would spur assimilation in both refineries and fuel retails subsequent to potentials to goal roughly $3 billion investments this year.

In an assertion made within obtaining to the News Agency of Nigeria in Lagos, the Ministry said that Nigeria would without help decline importation taking into account then it attained local production sufficiency.
It said the paperwork was with functional on the subject of key initiatives towards boosting local refining deed.

The confirmation said the overarching slant was to create a competitive downstream market in Nigeria and be a net exporter of petroleum products by 2019.

According to the declaration, the sector had not yet been deregulated.

The Ministry said the Federal Government, through the late growth price regime, would ensure that the price of products was monitored and modulated to ensure that citizens got a fair value for products they buy.

The message said the adjunct regime would for all time eliminate subsidy payments, which was estimated at N1 trillion in 2015 and not quite N16.5 billion along amid April and now.

It noted that the Nigerian National Petroleum Corporation drifting not quite N12.5 billion monthly subsequent to it took going on the responsibility of fuel importation at subsidised pricing, using slapdash oil as a means of dispute.

Commenting approximately the renewed insurgency and pipeline vandalism in the Niger Delta, the Ministry said it had drastically edited national incompetent oil production to 1.65 million barrels per hours of daylight to the side of 2.2 million barrels per day planned in the 2016 budget.

This, it said, would add-on response pension to the Federation Account and also warfare unprofessional volumes for Premium Motor Spirit conversion and impact upon forex earnings.

The declaration noted that the Federal Government already had an ongoing strategic want and investment to ramp occurring the countrys refineries to attract investors and in the long term become a net exporter of petrol.

The avowal avowed that substandard oil price was at $110 per barrel later and was presently valued at $40 per barrel, suitably it was lacking funds to cater for the subsidy regime owing to low substandard prices.

Besides, it acid out the non-availability of foreign disagreement to import petroleum products, tally that marketers had drastically shortened their importation by now third quarter of 2015 due to scarcity of forex.

It said there was a dependence for them to source forex independent of CBN to be skillful to meet the nations demand.

To accustom the prevailing high prices in certain states, it said marketers who sourced forex independent of the Central Bank of Nigeria to carry upon participation in PMS supply would continue to sell at prices that enable them to achieve full cost recovery.

The confirmation said that at an import story of $600 million per month for PMS, which was CBNs liquidity to maintain the importation of PMS, was challenged in the incline of improvement slapdash oil for exports.

It said for that excuse of the regulation of the downstream sector, handing out continued to incur N13.79 per litre under recovery in form of subsidy, even though states unproductive in their fiscal responsibilities.
This, it said indicated that growing subsidy differential is a threat to make public debt profile.

According to the statement, as at April 29, sedated-recovery of N13.79 per litre was recorded in the price of PMS, hence, the compulsion to an urgently residence the trend, as dealing out had no budgetary provision for subsidy payment in the 2016 Appropriation Bill.

It said: “Deductions from FAAC payments of N13.61 billion were recorded monthly while state debts accrued to N34 billion per month.

If subsidy was removed, a deduction of the estimated subsidy claim will reduce governmental exposure and support states in their fiscal obligations.