According to the Group CEO of NNPCL, Mele Kyari, local petrol production by Dangote Refinery, Port Harcourt Refining Company, and other Nigerian companies will not change fuel prices. In an interview on Arise television, Kyari debunked the misconception that petrol prices would decrease with domestic production.
Kyari confirmed that Dangote Refinery, inaugurated on May 22, 2023, by former President Muhammadu Buhari, will begin product distribution by the end of July or early August. He also stated that the Port Harcourt Refinery, expected to be operational by the end of the year, will further enhance local petrol production.
However, Kyari made it clear that despite these facilities’ anticipated increase in petrol volume, the commodity price would not decrease, even with local production.
“There is a notion that if the product is processed locally, prices will reduce. Let me make it clear that it is not going to change anything. If you produce locally, the refineries will also input the cost of production and other things, which will be sold at the current price.
“There will also be no subsidy when local production starts because there is no cash-to-back subsidy, this country no longer has the resources to continue with subsidy,” Kyari stated.
During a separate interview on Channels TV, the CEO of NNPCL addressed the issue of fuel queues and stated that they would be resolved by Saturday, ensuring that they do not extend beyond that timeframe.
I don’t see it staying beyond another day or two, maximum. It can actually be on Saturday. We have supplies. The critical trouble with the PMS system is supply, but I have supplies.
“There are over 810 million litres of PMS in depots, tanks and fuel stations across the country, so you don’t have the problem of transferring those from marine to land; you already have them on the ground,” he stated.
“You have seen a document in the space out there. Every company does this. It is a marketing document. It was not a price announcing document; every company keeps this record and adjusts it appropriately based on changing conditions in the market.
“So what you saw was just an internal company document that found its way into the internet. It is an NNPC document, but it was not intended to be an announcement and is not an announcement because it can change the next day,” Kyari stated.
“But, of course, the way we supply is not this way, so we maintain this level of supply consistently. That means you will see the arrival of products every day so that you continue to maintain that level of safety.”
After a meeting with the National Chairman of the All Progressives Congress, Senator Abdullahi Adamu, in Abuja, NNPCL boss Mele Kyari disclosed that President Bola Tinubu’s administration plans to repair and optimize one of the four refineries before the end of the year.
Kyari argued that continuing to subsidize fuel was no longer justifiable due to the high opportunity cost for the Federal Government. He highlighted that major cities like Lagos, Abuja, Kano, and Rivers consume a significant portion of the fuel distributed in the country.
Kyari also mentioned that the government was working on palliative measures to alleviate the impact of the pump price hike on Nigerians. Furthermore, he expressed concern over the NNPCL’s N2.8tn debt and the lack of funds released for subsidies in 2022 and 2023.
He said, “There was a subsidy in 2022, but in 2023, not a single naira was provided for the purpose. And ultimately, while we held back our fiscal obligations, we still have a net balance of over N2.8tn that the federation should have given back to the NNPC.
“For any company, when you have negative N2.8tn, there is no company in the whole of Africa that will lend to you. You cannot have receivables. The provision of subsidy is there, but absolutely there is no funding for it. It means it is only on paper. It doesn’t exist.