By Adedapo Adesanya
The Nigerian National Petroleum Corporation (NNPC) has disclosed fuel subsidy will likely not go away this year despite the signing into law the Petroleum Industry Act (PIA) by President Muhammadu Buhari some days ago.
It was initially thought that the PIA will automatically wipe out fuel subsidy from the petroleum sector but the Group Managing Director (GMD) of the NNPC, Mr Mele Kyari, said it may remain next year and possibly till 2023 when the new law should have been fully implemented.
A few days ago, President Buhari, who is expected to constitutionally vacate office on May 29, 2023, constituted a steering committee for the implementation of the PIA headed by the Minister of State for Petroleum Resources, Mr Timipre Sylva. The team was given one year to carry out its assignment.
The Minister had said it would be very difficult to immediately remove petrol subsidy with the new law without putting in place a gradual plan for this, with stakeholders like the labour unions carried along.
Mr Kyari, while speaking on Wednesday at the Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) 2022 to 2024 public hearing by the House of Representatives Committee on Finance, stated that the country may not exit the fuel subsidy regime in 2022, but stressed that this might be done by 2023 when the Act might have been fully activated.
He also informed the lawmakers at the hearing chaired by Mr James Faleke that his agency was working to track fuel consumption by deploying technology to monitor fuel distribution across Nigeria in a bid to check the activities of smugglers.
He stated that with the electronic monitoring, every truck carrying fuel would be visible as they discharged their load and would see all the fuel stations as they discharged.
Mr Kyari said that the national fuel consumption per day may not be above 60 million litres as being speculated, adding however that anytime NNPC supply less than that, there would be a problem.
He also said that President Buhari had personally directed him to take steps that would curtail cross border smuggling, while also admitting the challenges posed by land borders, aiding activities of smugglers.
The GMD said that those who took crude oil across the border would not sell at the official price.
He said that the corporation was already engaging the Republic of Niger to establish a retail NNPC outlet in the country’s neighbour, a move that would curtail the activities of smugglers.
Speaking on the Dangote refinery, Mr Kyari said that the decision of the NNPC to be on the board of the refinery was a calculated attempt, adding that as of today, Nigeria does not have strategic storage.
“We are taking interest in Dangote Refinery and up till now, he does not want us to take 50 per cent equity and it was structured on the fact that he must buy 300,000 barrels of crude oil from us per day,” he stated.
He said that Dangote Refinery had a choice to buy crude oil from anywhere in the works but was charged to buy from the country, stressing that it was a good deal the NNPC was proud to enter into.
Mr Kyari said that contrary to insinuation, the NNPC has not abandoned the country’s refineries and it was not about taking a $500 million loan to repair them as speculated.
He added that none of the country’s refineries had undergone full-scale rehabilitation since 2000.
Dipo Olowookere