The administration of President Muhammadu Buhari is working on a medium-term reduction of the pump price of petroleum products, Vice President Yemi Osinbajo disclosed on Friday.
Osinbajo, who is in the UK to sign the Nigeria-UK solar energy agreement, told Bloomberg in an interview that the government had made efforts to ensure that private refineries come on stream to reduce pump price substantially while reducing importation of refined petroleum.
He added that the government would reduce the role of the NNPC to its core objective of regulating the sector and ensure a reduction of pump price of petroleum products.
“We are going to be unbundling the NNPC so that its various components are effective core centres and are able to do their business well.
“In the refining area, we know that at the moment, we have quite a few of the refineries are getting back up. Using those refineries, we have seen the inefficiencies already; we’ve seen the cost.
“You can refine at 60 per cent capacity, but if it costs 20% more than it would cost you if you are refining elsewhere, from the private refinery, then you know that there’s a problem,” the vice president said.
“We are going to have private refineries at the site of the old refineries, so they can benefit from the available infrastructure.
“So, we think that in the medium term, we would be able to get cheaper pump price, pump price of oil would be cheaper because we would be importing far less refined petroleum. A lot of that will be produced locally.
“Now, we have well over 30 modular refineries, so we think a lot of modular refineries would come. Many of them, their major concern is feed stock, are we going to be guaranteed feed stock? We are working on that. Once we are able to deal with that, we think that we would be able to reduce pump price and get the whole business of importation of refined petroleum and the NNPC just getting directly involved; we are going to reduce that.
“The ultimate objective of course is to have NNPC regulatory, playing a more regulatory function, as the private sector takes most of the downstream”, Professor Osinbajo, a Senior Advocate of Nigeria added.
He pointed out that the government was not considering selling its refineries, which billions have been spent on over the years on Turn Around Maintenance.
“They are options that are always there. But we think that there are ways we can raise our own potion of contribution to the Joint Ventures. It will only be a last resort and we have not come anywhere near that”, he emphasised.