Kyari contradicts self on capacity of local refineries, says domestic production ‘would reduce cost of importing fuel’

Group Chief Executive Officer, Mele Kyari, Nigerian National Petroleum Company Limited (NNPCL) has contradicted himself while earlier declaring that the combined total output of Nigeria’s refineries cannot affect a drop in the pump price of premium motor spirit (PMS), or petrol.

Mr Kyari, had, Thursday, stated that the combined total output of all refineries in the country, including the newly-commissioned Dangote Refinery and Petrochemical plant in Lagos, cannot meet domestic demand for Premium Motor Spirit (PMS), otherwise known as petrol, enough to affect a price drop in the commodity.

According to Kyari, by implication, the price of petrol in the country will not be driven down by local production of the commodity alone.

Kyari, who disclosed this during an interview on Arise Television, Thursday, further dismissed the notion that petrol prices would reduce once the country starts domestic production, describing the claims as false.

Kyari also confirmed that the Dangote Refinery, which was inaugurated on May 22, 2023, by former President Muhammadu Buhari, would start pushing out products by the end of July and early August.

“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 and it 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.

However, during an interactive session with the media after a meeting with the National Working Committee (NWC) of the ruling All Progressives Congress (APC), in Abuja, Friday, Kyari disclosed one of the Nigerian refineries when it becomes active this year would reduce the cost of importing fuel.

Referring to the Dangote Refinery, Kyari said the situation will eventually stop the NNPCL from being the only importer of fuel in Nigeria.

“There is a gradual process now of making a flexible and single effect regime. Everyone will be able to have access to foreign exchange and there is a transition going on now. And NNPC cannot continue to be sole importer. We know that this is going to vanish and the market will stabilize this.

“There is an ongoing process of rehabilitation and one of the refineries will come on stream this year. The second will come on stream next year and the third will come the 2025.

“Of course, it is very obvious that we cannot longer afford it. Subsidy bills have pile up. The country is not able to settle NNPC for the money we are spending on the subsidy. Therefore, pricing these Petroleum at the market is the right ring to do at this time. We believed that this will benefit the overall country in the long run and in a long term” Kyari said.

He added that the immediate past administration did not provide any money for subsidy.

“There was subsidy in 2022 but in 2023, not a single naira was provided for the purpose of financing the subsidy.

“And ultimately while we held back our fiscal obligations, we still have a net balance of over N2.8 trillion that the federation should have given back to the NNPC.

“For any company, when you have negative N2.8 trillion, there is no company in the whole of Africa that will lend to you, you cannot have receivables” Kyari said.

Kyari also revealed that he is aware of plans by President Bola Tinubu to provide palliative to citizens to reduce the hardship brought on by the fuel subsidy removal.

Oracle Today recalls that President Bola Tinubu, last Monday during his inaugural speech declared that the petrol subsidy regime in the country, as he stated ‘no more fuel subsidy.’

The pronouncement within hours triggered massive hike in pump price of the commodity as marketers scramble to shore up funds ahead of the an official increase in the landing cost of the product.

Consequently, hoarding and black markets emerged with their attendant long queues at petrol stations across the country, as dispensing price skyrocketed to as much as N600/litre from the official N198/litre.

Presidency sources have since mounted damage control against the backdrop of a looming industrial action by organised labour which frown at the unilateral action by the Federal Government without due consultation and provision for palliative measures from fallouts on the Nigerian populace.