Nigeria will not increase its gasoline prices, President Muhammadu
Buhari told his oil minister and state oil firm head, summoned to his
villa last week, sources at the compound said.
Oil Minister
Emmanuel Ibe Kachikwu, the head of state oil firm NNPC Maikanti Baru and
the entire government have stepped up efforts to keep fuel flowing into
Nigeria without repeating the price increase of May and risking civil
unrest.
Shortly before the meeting former Nigerian National Petroleum Corporation (NNPC) bosses had said such an increase may be needed.
A
steep devaluation of the naira currency has made sales of petrol at
government capped prices unprofitable, marketers say. Months of unrest
in the Delta region has also cut Nigeria’s oil output and left as little
as half the crude available that it needs to swap for refined motor
fuel from trading companies.
“Gasoline is the top priority” for
NNPC, said one oil industry source who, like many in Abuja was meeting
daily with officials in the oil company. The company, and government,
the source said, “will do whatever they can” to stop shortages and keep
prices stable.
In a statement last week, NNPC’s Petroleum
Products Pricing Regulatory Agency, which oversees downstream
regulations, said there was “no basis” for price increase fears, and
assured the nation of “uninterrupted supply and distribution.”
Nigeria
has four oil refineries, but none of them have been able to run
consistently enough to provide Africa’s most populous nation with enough
gasoline and diesel – despite its historic position as Africa’s largest
oil producer, pumping around two million barrels per day.
That is, before unrest cut output by around a third earlier this year.
Available,
affordable gasoline is crucial to the government’s credibility.
Shortages bring the nation to a halt, leading to days-long queues for
fuel and power cuts at small businesses that rely on generators to
withstand frequent power outages.
Nigerian unions have already
threatened to take to the streets if prices rise further, as consumers
face inflation that is at an 11-year high of 17 percent.
The
Independent Petroleum Marketers Association of Nigeria, which represents
small and medium fuel sellers, is, however, calling for higher prices.
It argues that the current state cap of 145 naira per litre is far too
low, given the devaluation.
The currency fell to 420 per dollar on
the parallel market last month, compared with the rate of 285 that the
government was using when it set the cap.
Gasoline is imported
into Nigeria by NNPC and independent importers, with each usually
providing half the total needed, but the government said it has been
providing some 90 percent in recent months. (Reuters).