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Contrary to the perception created on Christmas day that the price of petrol would be reduced to N85 per litre effective January 1, the Minister of State for Petroleum, Mr. Ibe Kachikwu, sunday clarified that its official price would be announced next month.

He added that at the current price of crude oil, the subsidy element had been eliminated, but the price of petrol had not been deregulated nor
would it be deregulated come January.
“It will be adjusted within the modulating band of N87 per litre to N97 per litre in accordance
with the international price of crude oil,” he explained.

The minister, who made the clarification during an inspection tour of the Kaduna Refinery and Petrochemical Company (KRPC), said the new
price was imperative in view of the current market price of crude oil.
According to him, the price of petrol could go either way, “it may be increased above the current selling price or may be reduced below the current selling price all things being equal”.

He said his visit to the Kaduna plant was to enable him have an on-the-spot assessment of its refining capacity, stressing that the federal government was working round the clock to ensure availability and sustenance of petrol in a few weeks from now in order to end the fuel
queues.
Speaking on speculations that the federal government intends to sell the refineries, the minister stated that there was no such plan to the best of his knowledge, pointing out that the government was working round the clock to ensure that the refineries operate at optimum capacity to satisfy the needs of Nigerians.
On the retention of subsidy on fuel, he did not conceal his displeasure over what he described as “political subsidy”, saying that the amount spent in the past was huge, but pointed out that government intends to introduce a price modulation band with a view to having a stable
market.
According to the minister, “If there is an increase or decrease in the price of crude oil, we will make the necessary adjustment, so in January
2016, we will announce the new price of petrol in accordance with trends in the market.”
He said the Kaduna refinery was doing well, adding that more work needed to be carried out on the plant to make it operate optimally.
He said the refinery was currently producing about 1.5 million litres of petrol per day, but efforts were being made to produce about 2
million litres of petrol per day. He said the current hardship being faced by Nigerians would soon be a thing of the past, adding that the queues, which are gradually disappearing, would completely cease to exist in a matter of weeks.
He stressed that the federal government was currently not paying subsidy on petrol due to the low price of crude oil in the international market.
Kachikwu also said that the situation would likely remain unchanged insofar as oil prices remain low, stressing nonetheless that he was more interested in ensuring that petrol is available and affordable than dwelling on subsidy removal.
He noted that the government was currently modulating the pump price of petrol to ensure that supply of the product remained in line with
trends in the market.
Kachikwu also explained that by the end of January 2016, he expects that Nigeria would be able to source up to 10 million litres of her domestic petrol consumption from its four refineries in Warri, Port Harcourt and Kaduna.
His clarification on the subsidy issue also became necessary following requests made by the Nigeria Labour Congress (NLC) and Conference of Nigerian Political Parties (CNPP) that he provides an explanation on reports that the government was going to deregulate the downstream petroleum sector and remove the subsidy on fuel.
On this, he said through the price modulation mechanism, the government would continue to monitor prices to keep it within a specified band.
“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 a huge N1 trillion, and I think everybody is on the same page that we need to get out of it.
“Where we have a disagreement is if we get out of it, should we sell products at a certain price or should you let the free market to roll in so that
you can skyrocket prices.
“Today, there is no subsidy, we are selling products at N87. In January, we will look at what the trend is and 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.”
Kachikwu explained that his focus right now was to make sure that the refineries are working, saying: “The more they work, the higher the chances that we will be closer to the sort of pricing we are comfortable with than when they are not working. That is why you see me putting
a lot of energies in going around the refineries.”

Kachikwu explained that President Muhammadu Buhari was backing the price modulation mechanism to keep it within the reach of
Nigerians, adding that he was more interested in balancing market trends with such desire.
“The president is very emphatic on this, he says for now, he expects that products should be at 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?” he asked. Continuing, he said: “I don’t want to get caught into this subsidy or no subsidy issue, or on 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 held to account.
“The reliability of that and the affordability of that is an issue we need to get away from whether or not you believe in subsidy.”
Kachikwu said that in line with the desires of the president, he was pushing to establish a regime of efficient and affordable fuel supply in the
country.
“Would you therefore free the price so that people can sell at whatever prices? Not likely, we would like to see some level of modulation where prices can relate to what the market dynamics are and that is what we are doing.
“My commitment and I think that is what the president’s commitment is, is one, provide products all the time so that there is efficiency, and provide it at the least possible price that you can and let it have some relationship with what the trends are,” he noted.
The minister also stated that “when the price of crude oil begins to go up – and we have an interest in both because we want the price of crude to obviously rise – and begins to affect the selling price of local products, we will look at those trends and then begin to see how we can adjust our pricing”.
“But we are not going to be adjusting prices on a day-to-day basis, we are going to take like an average price and I think that today when you look at prices, we have no subsidy but prices remain low and that is what we need to do,” he
added.
Speaking on the volume of products he expects the refineries to add to the domestic requirements, Kachikwu explained that though the country would still import products next year, production could rise to 10 million litres of petrol a day from the refineries starting from the end of January when repair works would have been completed on them.
“Ideally, we want to be able to get to about 10 million-type capacity out of some 40 million that we say is the national consumption per day.
“All things being were equal, I think the maximum capacity for Kaduna will be in the 2 million to 3 million range, Port Harcourt will probably be in the 5 million to 6 million range, and Warri if it comes on stream will be another 3 million or 4 million.
“Warri is projected to come back between early and mid-January. So I will say that by the end of January, if all things are working and we do not
have any other complications arising from these aging plants, we will expect to see 10 million
litres,” he said.
But as the government gets set to adjust the price of petrol in line with the going rate of crude oil, the Minister of Agriculture and Rural Development, Chief Audu Ogbeh, has said that the country will benefit more, if the funds earmarked for fuel subsidy are channelled into the agricultural sector.
According to Ogbeh, if the funds running into billions of naira spent on subsidising petrol are deployed to agriculture, this will guarantee long- term revenue for the nation.
Ogbeh, in a statement signed by the Director of Information in the ministry, Mr. Tony Oheari, also pledged support for all agriculture institutes in the country working on robust research to improve crop yields.
The minster also said part of the subsidy funds should be used to enhance the capacity of agriculture colleges and institutions and for extension services.
He explained that the essence of Colleges of Agriculture is to produce a new generation of young farmers to take over from the old ones, adding that all malfunctioning agricultural research Institutes would be fixed.
“The minister promised to establish extension offices to be manned by extension officers in all the local governments in Nigeria in the next four to six years, with students of Colleges of Agriculture involved in the new extension system,” he said.