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NNPC CEO Mele Kyari Exposes Grim Reality; “Local Production Won’t Lower Fuel Prices”

In a recent interview on Arise television, Mele Kyari, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), debunked the notion that local production of petrol by refineries in Nigeria would lead to a decrease in pump prices. Kyari emphasized that despite the upcoming production from facilities such as Dangote Refinery and Port Harcourt Refining Company, the cost of petrol would remain unchanged. He explained that the refineries would incorporate the production costs and other expenses, resulting in the commodity being sold at the current price.Kyari confirmed that Dangote Refinery, which was inaugurated on May 22, 2023, by former President Muhammadu Buhari, would start operations in late July or early August. He also mentioned that the Port Harcourt Refinery would be operational by the end of the year, further boosting local petrol production. However, Kyari stressed that even with increased production volumes, petrol prices would not decrease due to the inclusion of production costs.Addressing the ongoing fuel queues across the country, Kyari assured that the situation would not persist beyond Saturday. He stated that there were over 810 million liters of petrol in depots, tanks, and fuel stations nationwide, eliminating the need for transferring supplies from marine to land. Kyari also clarified that the pricing document circulating on the internet was an internal marketing document and not an official announcement. He reaffirmed that petrol prices were subject to change based on market conditions.Regarding the subsidy on petrol, Kyari expressed that once local production commenced, there would be no cash-to-back subsidy as the country lacked the resources to sustain it. He emphasized that the government’s aim was to eliminate the subsidy and that its removal had already positively impacted the bond market. Kyari highlighted the need for efficiency and competition in the sector, mentioning that oil marketing companies would now be encouraged to invest and import or sell locally-produced petrol at market prices.In response to the fuel price increase, the Nigerian House of Representatives called for an end to subsidies on all petroleum products. However, the House recommended the implementation of palliative measures to alleviate the effects of the subsidy removal on Nigerians. The recommendations also included the introduction of alternative transport systems with cheaper fuel consumption and the issuance of stricter regulations to prevent profiteering. The House further proposed a reconciliation meeting between relevant agencies to ensure transparent utilization of crude entitlements.The Nigerian Labour Congress dismissed reports of an imminent nationwide protest against the fuel price hike, clarifying that they were currently holding internal meetings to discuss the issue. The congress assured the public that they would provide updates on their next course of action. In a separate development, civil society organizations in Edo state staged protests against the subsidy removal, causing disruptions to vehicular movement in certain areas.


Ademola Adeyemi

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