Nigeria will become a net exporter of premium motor spirit, petrol, by 2024, the Group CEO, NNPC Limited, Mele Kyari has insisted, adding the refineries would commence operation before the end of the year.
Kyari who spoke at PENGASSAN Energy and Labour Summit, PEALS, in Abuja, Monday, explained that the coming on-stream of refineries would guarantee energy security for the country and ensure growth for the oil and gas industry.
The summit had the theme: Petroleum Downstream Deregulation and Gas Utilisation.
The NNPC boss pointed out that while it was difficult to actually ascertain the amount of petrol consumed daily in the country; evacuations from depots have dropped by 30 percent since subsidy removal was announced.
“I have always said that we do not have credible data on petrol consumption in this country and the reason is very simple. Technology absence, cross border smuggling and all the other segments of our system that are still not optimum cannot allow us to have a fixed number around consumption. But we know the evacuation.
“Evacuation means every litre of product that leaves the depot is known because the trucks and the volume they carry are known. But once they get out of the depots, the next story is everybody’s guess”.
He explained that since the Petroleum Industry Act abolished the payment of subsidies from February 17 2022, the government decided to provide a budget to cover the cost until 30th June, 2023.
“From 2022 when until 29th of May 2023, not a single Naira was paid to the NNPC Limited as cost of subsidies. That means we were carrying the entire cost on the balance sheet of the NNPC. We hold back fiscal revenues, taxes, royalties, including profits, and yet because we are seeing values exceeding N400 billion in a month for subsidy, there is no way these fiscal obligations will cover the cost of subsidy.
“So we were heading towards what we can call, technically, bankruptcy of NNPC because we were going into negative cash flow. By the end of June 2023 we would have been in negative cash flow. What this simply means is that NNPC would have been bankrupt if that bold decision was not taken by the President”.
He also noted that subsidy was also promoting corruption and fraud in the industry, this is because there was “simply no way you can manage an environment that included shortages and cross border smuggling due to the huge difference between market value of the product and the price consumers were paying”.
He said the company was investing heavily on facilities for the distribution of Compressed Natural Gas, CNG, to reduce pressure in the demand of petrol.
He pointed out that while the value was the same, the cost for “CNG is cheaper than petrol”.
Speaking earlier, the President of PENGASSAN, Comrade Festus Osifo said the removal of subsidies and “the current state of our refineries are of paramount importance, touching the lives of every Nigerian. These are intricate challenges that demand comprehensive solutions, balancing economic viability and the well-being of our populace”.
He observed that recent policies of the Federal Government have “placed untold hardship on Nigerians. Chief of which is the PMS subsidy removal and the floating of the Naira-dollar exchange rate”.
Also at the event, the Secretary to the Government of the Federation, Senator George Akume and the Minister of Labour and Employment, Mr. Simon Lalong assured that the government would continue to provide the enabling environment for the growth of the oil and gas industry.
