THE Department of Petroleum Resources (DPR) has denied reports credited to the Director of the agency, Mr Sarki Auwalu, to have stated that if subsidy on petrol was totally removed, the price per litre of the product will rise to about N1,000.
A statement by Mr Paul Osu, the Head, Public Affairs department of DPR said the report, which was also published by National Record based on a statement posted on DPR’s website, “was misleading” and that the “the comments of the director was clearly taken out of context.”
“The director specifically created a scenario of price instability of PMS based on current dollar to naira differentials to the effect that if Nigeria continues to rely on the importation of PMS without creating alternative energy sources like CNG, LNG, AUTOGAS etc which will provide price buffers for consumers and ultimately crash the price of PMS, then the product will be subject to prevailing market forces.
“The Director further re-emphasised that the strategy for alternative energy sources is a cardinal programme of the government which has led to the declaration of the Decade of Gas (DoG) with the objective to migrate the Nigerian economy to a gas based economy by 2030,” Mr Osu stated.
Flashback
Mr Sarki Auwalu, DPR’s Director, had in a function in Lagos recently warned that the pump price of petrol in Nigeria may rise as high as N1,000 per litre if the current subsidy on the product is totally removed without an alternative energy source. A statement by the DPR on Mr Auwalu’s warning was subsequently posted on DPR website last Monday.
Checks by National Record indicate that the DPR had pulled down the statement from its website.
The statement, entitled “DPR: Without Alternative Energy, Petrol Price Will Rise On Subsidy Removal”, quoted Mr Auwalu to have stated in the course of answering questions after his presentation, that Nigerians may pay as high as N1, 000 to buy one litre of petrol in the country when subsidy on petrol is removed and when the alternative energy or autogas gas policy becomes fully operational.
According to the DPR Director, ending petrol subsidy would require making alternative fuel available to Nigerians and that failure to do that will plunge Nigerians into paying higher petrol prices when subsidy is removed with Nigerians probably going to pay as high as N1,000 to buy one litre of petrol in the country. This will require alternative energy or autogas gas policy to become fully operational.
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“So, to eliminate subsidy, they don’t call it subsidy anymore now, it’s under-recovery of purchase. So, to eliminate under-recovery, what you need is alternative fuel. Without alternative, you will subject people to higher prices and that is why we go for price freedom.
“As at today, there are 22 million cars in Nigeria; eight million are for public use. Imagine if you want to convert every car into gas, the average cost of conversion is $400. Converting eight million cars requires $3.2 billion. To do that, there are a lot of environmental investors which can invest and recover from the sale of gas and we are encouraging that.
“Once that is achieved, you will see that PMS can be sold at N1000. After all, the average distance covered by one gallon equivalent when you compare it with LNG or CNG with respect to energy for mobility is 2.7 against one. One for PMS, 2.7 for LNG or CNG,” Auwalu was quoted in the statement.
