Former and present Group Managing Directors of the Nigerian National Petroleum Corporation have expressed fears that the current pump price of N145 per litre is no longer feasible.
They said the amount does not correspond with the price-determining components of the commodity and the fluctuations of the foreign exchange rate.
They stated this after a one-day meeting they held with the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, in Abuja.
The NNPC in its statement said, “They (the GMDs) noted that the petrol price of N145/litre is not congruent with the liberalisation policy especially with the foreign exchange rate and other price determining components such as crude cost, Nigerian Ports Authority charges, etc remaining uncapped.”
The declaration of the NNPC present and past bosses is coming few weeks after oil marketers revealed that the actual or real cost of petrol was N151.87 when all the pricing components are adequately captured.
The marketers had stated that they were struggling to maintain petrol price at N145 per litre because of the stiff competition in the downstream oil sector, but stressed that the practice was not sustainable.
The GMDs, however, commended the NNPC for resolving the fuel supply crisis and urged the corporation to come up with measures that will ensure sustenance of seamless supply of petroleum products nationwide.
According to the corporation, the GMDs expressed concerns about the declining crude oil production level and its consequences on the environment and the nation’s revenue.
They further agreed that if the current situation remains unchecked, it could lead to the crippling of the corporation and the nation’s oil and gas sector which is the mainstay of the Nigerian economy.
The former GMDs advised that funding of JV Operations should be the first line charge to oil revenue to ensure sustainable production and reserve growth.
The former GMDs endorsed President Buhari’s steer for sustaining exploration activities in the frontier basins particularly the ongoing efforts in Chad Basin and the Benue Trough and advised the GMD to pay priority attention to the Chad Basin where promising prospects are recorded.
The former GMDs noted that for effective functioning of any National Oil company (NOC), the technical components of the country’s Exploration & Production (E & P) must be integrated as part of the country’s NOC. They therefore posited that National Petroleum Investment and Management Services, NAPIMS, being the technical component of Nigeria’s E & P, and not just an investment vehicle, must remain with and managed by NNPC.
They resolved that the current Petroleum Industry Bill (PIB) which proposed the incorporation of NAPIMS and taking it out of the NNPC will inhibit the effective functioning of the NNPC as a National Oil Company (NOC).
This will make NNPC to operate at a different level compared to its peers in other OPEC Member Countries. While the former GMDs have no issues with incorporation, they strongly advise against taking NAPIMS out of NNPC.
The former GMDs encouraged NNPC to improve its relationship with its key stakeholders such as the Federal Government, the National Assembly, Host Communities and especially its International Joint Venture Partners.
The former GMDs, however expressed serious concerns about the continued dwindling of NNPC revenue and advised that the Corporation should pay particular attention to its revenue-generating entities such as the Nigerian Petroleum Development Company (NPDC), Retail and the Refineries to return the Corporation to high performance, growth and profitability.
They expressed worries about the level of NNPC’s debt profile and advised that as a matter of urgency, NNPC should establish the true state of its current financial status and immediately decide on the most appropriate capitalization model.
The former GMDs also reviewed the state of NNPC Pensions and advised that NNPC should explore avenues to close the pension funding gap including the restructuring of the current model.
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