The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu on Thursday said that owing to the competition inherent in the Premium Motor Spirit (PMS) price modulation, the product’s prices will crash in the next four to six months.
He urged Nigerians not to undermine the present prices of the product, stressing that a look at the prices of diesel, which is now 40% down and recording surplus supply, is enough evidence that the petrol prices will also crash.
Presenting his scorecard on his two years in office in a podcast released to reporters in Abuja, the Minister said, “Once Nigerians throw their trading skill in, once competition thrives, the prices will continue to tumble.
”My guess is that you will see the prices tumble in the next four, five to six months. The market will be more stable and definitely the prices will be lower than what we see today.”
Still capturing hope in the petroleum downstream sector, he said that in the last 10 years, this is the first time that the three refineries are working simultaneously, although at 50 % of their capacity.
“We expect to put in investment to put them to 90% capacity,” he said.
Kachikwu said that this is the first that the NNPC group of companies are recording savings which could be used to address the issue of the refineries alongside the Joint Venture Partners.
The minister noted that this is the first time the government is upgrading the depots to extent that of the 19 only three are not functioning at the moment.
He said this is the first time that a government is considering the replacement of the 35 year old pipelines.
It has been one massive problem after the other in order for the sector to stabilize in term of product supply in the country.
Kachikwu however submitted that but “the time has come to take on the problem bullishly and that is what we are trying to do. So, we believe the ire will be money for infrastructural development in the downstream sector.
“We believe that a lot of the companies will jump up now and be able to sell at the right prices and not the pump down by the problem of price control and will be able to grow their businesses. We believe that most of them efficient ones will drive prices southward rather than northward.
“And we believe that almost 200,000 jobs will be created in this sector and over 400,000 jobs will be saved which would have been lost if we had continued on the path we were in.”
He revealed that on assumption of office two years ago, he inherited a debt of N600billion owed to marketers of Premium Motor Spirit (PMS) which the federal government settled.
He recalled that they seized importing the products prior to the payment of their debt.