The Minster of State for Petroleum Resources, Dr. Ibe Kachikwu, has clarified some alleged newspaper misrepresentations, which credited him with a statement that the current under recovery in imports of petrol was about N1.4 trillion till date, saying the story was heavily misrepresented.
Speaking exclusively to THISDAY, Kachikwu said his statement, which was misreported was to the effect that given the fixed price regime of petrol, the Nigeria National Petroleum Corporation (NNPC) was landing products at above the fixed price for the products at filling stations.
With this understanding, therefore, he said: â€œunder recovery does exist but the NNPC would be in the best position to provide the most authentic figure as that is the body currently importing most of the petrol retailed in Nigeria. I, therefore, did not state the under recovery amount.â€
Kachikwu last Thursday quoted as saying the country is currently recording an under-recovery of N1.4 trillion per annum on petrol.
Kachikwu, who spoke at a workshop on harmonisation of Liquefied Petroleum Gas (LPG) regulatory requirements, was further quoted as saying the unnecessary cost incurred from petrol consumption, especially as majority of the commodity was imported, had further highlighted the need for the country to shift to alternative energy for our transportation needs.
According to some of the reports, he was quoted thus: â€œWe need to move away completely from the utilisation of only petrol in the transport sector. It is creating a lot of under recovery â€“ over N1.4 trillion per annum to the federal government. We need to begin to look into other components of cleaner fuels and rely less on petrol. It would be better for the country. It would eliminate fuel among others.â€
Under recovery means a situation whereby the NNPC is incurring the cost of the differential between the official pump price of petrol and the actual cost of the commodity. It is another term for subsidy, since the official price of petrol is lower than the actual market price.