800,000 bdp Lost To Pipeline Vandalism – Kachikwu

Following the current state of fuel scarcity and the non-adjustable hike in prices, the minister of state for petroleum, Dr Ibe Kachikwu, has reported that Nigeria loses about 800,000 barrels of crude oil every day to pipeline vandals.

He stated this while addressing the House of Representatives on reasons behind the price increase, also noting that government stopped paying for fuel subsidy since the beginning of 2016.

He said that renewed sabotage, pipeline vandalisation and other factors left the federal government with no other option than to initiate an increase.

“We had no other option,renewed sabotage and pipeline vandalism in the Niger Delta drastically reduced national crude oil production to 1.4 million barrels per day as against 2.2 million barrels per day planned in 2016, thereby reducing the income to federation account,” he said.

Kachukwu defended the stoppage of subsidy payment, saying that subsidy had to be paid in April due to the prevalence of queues in fuel stations, to ease the scarcity of the product.

“Subsidy was actually removed in January and we had an over-recovery from January to March. But even with our best efforts, in April the queues persisted, so subsidy re-emerged in April at the cost of N12 billion.”

He further told the lawmakers that the NNPC lacked the logistic capacity, in terms of funding and volume, to meet the increase in supply leading to the current shortage of the product, adding that with the liberalisation of the market and government’s commitment towards resuscitating the refineries, importation of fuel will cease by 2018.

 Kachikwu said that if the government did not take the action (fuel hike), in the next 30 days, the three tiers of government would not be unable to pay salaries or meet their financial obligations, while there would have been increased scarcity of the product leading to longer queues and continuous upward surge in the price of product across the nation as hoarding and smuggling would continue.