•Says local refining won’t reduce price of fuel
From Adanna Nnamani, Abuja
Amid fuel crisis in the nation, Managing Director of the Nigerian National Petroleum Corporation (NNPC) Limited, Mele Kyari, has said that Nigeria would begin exporting petroleum products to other countries from 2024.
Kyari stated this Monday, at the opening of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) Energy and Labour Summit 2023 with the theme, “Petroleum Downstream Deregulation and Gas Utilisation” which took place in Abuja.
He said: “The market is adjusting itself. Market adjustment is what we are seeing today and it is very good for our country so that the market forces take control, while the government plays its own role of making sure that palliatives are made available. I strongly believe that in 2024, this country will become a net exporter of petroleum products. The meaning of this is that we will have sufficient volume in the country, and then we will have a delta that can leave our country and that is where value is created.”
He, however, noted that for this to happen, the country must first focus on achieving gas as transportation fuel.
“This needs everybody’s support. This support means we have to focus on gas as transportation fuel. This is very practical. Already, significant activities are going on, the government is putting money into it, NNPC is investing in partnerships and we believe that in 2024 that revolution will be very manifest and people will have access to cleaner and cheaper fuel.
“It is already happening, a number of buses are already converted, and a number of state governments have bought buses which are running on Compressed natural gas (CNG). We are carrying out significant projects that will bring CNG into the market with our partners and we believe this will work for our country.
“The only sustainable source of energy that we can have today is to build our gas resources and that is why we are focused on guaranteeing energy security for the country. Therefore, we are focused on building the necessary infrastructure that will deliver gas to the domestic market and we are almost done. So once there is what is called the OB3 river crossing. There is a 48-inch pipeline that once it crosses the river Niger, we have a clear line on sight. This will be the gas revolution for our country.
“It will enable delivery of gas from the eastern corridors to the western corridors linking up the AKK pipeline and also the bottleneck supply to the east. Without doing this, we can not do anything and we are almost done. Once that is done, people will have access to gas closest to them,” he said..
The GMD noted that contrary to popular beliefs, local refining would not lead to fall in fuel price but would only guarantee supply.
“I need to correct one erroneous impression. When we refine locally, yes, you do have advantages creating wealth, creating employment, taxes and all forms of values, but when it comes to the pricing of petroleum products itself, it is the international market that prices it. So, you cannot price it in your local currency and then convert it into International. It is the other way round,” he said.
Kyari also said that the NNPC would have gone bankrupt if President Bola Tinubu had not intervened by removing fuel subsidy in May.
Meanwhile, Group Managing Director of Nigerian National Petroleum Corporation Limited (NNPCL), Malam Mele Kyari, disclosed that the Federal Government has stopped payment of subsidy on petroleum products.
He said that contrary to insinuations on social media, the federal government was no longer paying subsidy to any person or group for bringing petroleum products into the country.
“No subsidy whatsoever. We are recovering our full cost from the products that we import. We sell to the market.
“We understand why marketers are unable to import. We hope that they begin to do so very quickly and these are some of the interventions government is making. There is no subsidy,’’ he said.
Kyari further stated that the pockets of low queues witnessed across some states recently were due to bad roads that had made transporters to divert the product to other routes.
“We have seen in very few states pockets of very low queues. This is not unconnected with the road situation and that’s why we’re seeing some blockades on our roads.
“Moving the products from the southern depots into the northern part of the country takes them much longer time now than it used to be.
“They have to re-route their trucks around many locations for them to be able to reach their destinations and that created delays and some supply gaps. But, that has been filled and we do not see any of such problems again.
“Secondly, because of the full deregulation that we have in this sector, marketers are now competing amongst themselves,” he said.
The NNPCL group managing director also said that some of the queues were caused by the preference of customers to patronise filling stations that offered low prices.
“You must have noticed that some fuel stations will reduce their prices by N2 or N3. So customers will naturally run to the places where you have that reduction in prices and probably create panic.
“This is because those who don’t know why they are doing it will think that there’s something happening or that there’s an ominous sign of scarcity,’’ he said.
According to him, there are over 1.4 billion litres of petrol available for local consumption, both on the seas and on land, adding that there is no cause for alarm.
Kyari explained that market forces were now playing out and that marketers were competing for the product and how to satisfy their customers as well.
‘’There are few issues we’re engaging them to resolve, alongside other agencies of government, particularly critical issues around access to foreign exchange.
“And as you all know, government is doing so much to ensure supply of forex into the market.
“We know that this FX markets will stabilise the current I&E window is around 770.
“And we know that those inputs from government will crystalise and they will come to an equilibrium position in the FX market and this is the dream of this country,’’ he said.
Kyari assured marketers of a stable forex and a situation where the prices of the product would align with the prices of other commodities.