Mohammed said the recent attacks on oil installations by militants drastically reduced national crude oil production to 1.65 million barrels per day, against 2.2 million barrels per day.
He said the tough move was to end the lingering fuel scarcity in the country.
Speaking at the inauguration of the Advertisers Association of Nigeria (ADVAN) marketers’ conference in Lagos on Friday, May 13, Mohammed explained that only the liberalisation of petrol supply would ensure the availability of the product.
In a statement issued by his media aid, Segun Adeyemi, he said: “It (new petrol price regime) would end the recurrent fuel scarcity by ensuring product availability across the country, reduce hoarding, smuggling and diversion of products substantially, improves fuel supply situation through private sector participation, creates labour market stability, as this will potentially create additional 200,000 jobs through new investments in refineries and retails and prevents potential loss of 400,000 jobs in existing investments.”
According to the minister, the crash in crude oil price , which put a toll on foreign exchange earnings, had further compounded the crisis in fuel supply.
“With the drastic fall in the price of crude oil, which is the nation’s main foreign exchange earner, there has also been a drastic reduction in the amount of foreign exchange available. The unavailability of forex and the inability to open letters of credit have forced marketers to stop product importation and imposed over 90 percent supply on the NNPC since October 2015, in contrast to the past where NNPC supplies 48 percent of the national requirement,” Mohammed said.
He said the recent attacks carried out by the Niger Delta militants on oil installations drastically reduced national crude oil production to 1.65 million barrels per day, against 2.2 million barrels per day planned in the 2016 budget thereby reducing income to federation account and also affecting crude volumes for PMS conversion.