Petrol will soon be cheaper, says Osinbajo

Vice-President Yemi Osinbajo has revealed that the Muhammadu Buhari administration is working on a medium-term reduction of the pump price of petroleum products.

The professor of law said the government was working on ensuring that private refineries work, while reducing importation of refined petroleum.

“We are unbundling the NNPC so that its various components are effective core centres and are able to do their business well,” he told Bloomberg in an interview.

“In the refining area, we know that at the moment, we have quite a few, about two 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 percent capacity, but if it costs 20% more than it would cost you elsewhere, perhaps a private refinery, then you know that there’s a problem.”

He said the government was going to reduce the role of the NNPC to its main objective of regulating the sector and ensure a reduction of pump price of petroleum products.

“We are going to have private refineries at the site of the old refineries, so they can benefit from the available infrastructure.

“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 fine petroleum. A lot of that would 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 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.”

He also said the Petroleum Industry Bill (PIB) would be broken down and passed in smaller pieces

“Separating the PIB and breaking it up obviously is the way I would think that we’ll proceed…that’s really what the market has been waiting for,” he said, adding that it would be resent to the national assembly in the first quarter of 2016.

Osinbajo also made comments on predicted recession in the country, saying the government would rather spend more that cut back.

He said the government would be looking at $25bn fund for infrastructure, while diversifying the economy through agriculture.