Ibe Kachikwu addresses the current Fuel pump Price from N86 to N175, urges Nigeria to be patience in new (VIDEO)

The Minister of State for Petroleum Resources DR. Ibe Kachikwu addresses the current Fuel pump Price from N86 to N175, urges Nigeria to be patience. He said the federal government would have had to source for N16.4 billion every month to pay subsidy claims of petrol marketers if it had not taken the decision to remove subsidy on fuel consumption. Watch Video after the cut.

Kachikwu explained in facebook account @ibekachikwu that as at the time the government made the decision to end subsidy on petrol and subsequently hiked the pump price, it was incurring about N13.7k as subsidy on each litre of petrol bought by Nigerians.

He said at such rate, government would have paid out N16.4 billion to marketers monthly, adding that the government does not have such fund in its 2016 budget, more so now that the country's earning from crude oil production has dropped.

THISDAY monitored the minister's tweet weekend in Abuja where he tried to justify the new framework for petroleum supply, distribution and pricing. He also listed the benefits of the new policy.

"There is no provision for subsidy in 2016 appropriation. As at today, the current PMS price of N86.50 gives an estimated subsidy claim of N13.7 per litre which translates to N16.4 billion monthly. There is no funding or appropriation to cover this," said the minister in the tweet.

He further stated: "NNPC has continued to utilise crude oil volumes outside the 445,000 barrels per day, thereby creating major funding and remittances gaps into the federation account."

Kachikwu also said renewed insurgency and pipeline breaks in the Niger Delta has resulted to Nigeria's daily crude oil production dropping to 1.65 million barrels per day (mbpd) as against the 2.2mbpd that was projected in the 2016 budget.

He said this has reduced government's earnings and foreign exchange build ups to perhaps support subsidy on importation of petrol into the country.

He equally listed the benefits of the new policy, saying that going forward, 100 per cent payment to the federation account on the allocated 445,000bpd of crude oil to the Nigerian National Petroleum Corporation (NNPC) would be assured and tailored to provide palliative measures for the country.

He also said the policy will encourage market stability in the downstream petroleum sector; stabilise fuel supply in the country; discourage hoarding of products and reignite investors' interests in setting up refineries in the country to cut importation of petroleum products.

Meanwhile a former energy and mines minister of Venezuela, Dr. Alirio Parra has described the recent decision of the government on Nigeria's downstream petroleum sector as historic and smart.

Ibe Kachikwu addresses the current Fuel pump Price from N86 to N175, urges Nigeria to be patience in new (VIDEO)

Video: Sequel to the Federal Government's announcement of the new framework for PMS supply, distribution and pricing, please watch and listen as I answer some of the pertinent questions raised from both stakeholders and the general public on the new framework.