The Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company (NNPC) Limited, Mele Kyari, has said oil refineries were not created to reduce petrol prices.
Kyari stated this on Friday when he appeared before the National Assembly Joint Committee on Appropriations.
Recall that the Senate Committee had issued a 24-hour ultimatum on Wednesday to Kyari and the Executive Secretary of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to appear and warned that failure to appear undermines the legislature and sabotages the process.
Speaking during his appearance, Kyari said the expected functionality of refineries does not guarantee a potential drop in the pump price of petroleum because it is not the main objective of the refineries.
He buttressed that maintaining the energy security target has fostered the confidence that in 2024, Nigeria will become a net exporter of petroleum products.
The NNPCL boss affirmed that no subsidy is charged to the federation, adding that the NNPC has contributed 4.45 trillion naira as direct revenue into the federation in a combination of taxes, royalties and dividends and paid 406 billion naira as dividends to the Federal Government’s account from July 2023.
According to Kyari, Nigeria does not have credible data for PMS consumption in the country because of the absence of an instrument to measure.
The federal government, he said is not paying any form of subsidy on petroleum motor spirit (PMS), instead the national oil company was recovering its full cost from imported products.
“No subsidy whatsoever. We are recovering our full cost from the products that we import. We sell to the market,” Kyari said.
“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.”
Kyari said recent pockets of queues witnessed across some states were caused by bad roads, forcing transporters to divert the product to alternative routes.
“We have seen in very few states pockets of very low queues. This is not unconnected with the road situation and that is why we are seeing some blockades on our roads,” he said.
“Moving the products from the southern depots into the northern part of the country takes them much longer time now than it used to.
“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 “
The NNPC GCEO also said some of the queues were due to some customers’ preference for filling stations with 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,” he said.
“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.”
The NNPC boss said there are over 1.4 billion litres of petrol available for local consumption, adding that there is no cause for alarm.
“There are few issues we’re engaging them to resolve, alongside other agencies of government, particularly critical issues around access to foreign exchange,” he said.
“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.”
Kyari said the inputs from the government would soon crystalise and “they will come to an equilibrium position in the FX market”.