No petrol price increase soon, NNPC GMD, Kyari, tells Neptune Prime

As the country’s petroleum industry takes a giant step of making the Nigerian National Petroleum Corporation (NNPC) a private venture, Mele Kolo Kyari, its Group Managing Director (GMD), talks about fuel price increase, deregulation, buying into Dangote Refinery and others in an exclusive interview with Neptune Prime.

Neptune Prime: What is the latest about the removal of subsidy and the increment of the price of petroleum products?

GMD NNPC: I understand there is a lot of anxiety around the passage of the PIB, now PIA, which contemplates an ultimate removal of petroleum subsidy but it didn’t set any date; it created a transition situation which will respect the fact that when you change the price of petroleum, you do have issues with affecting the cost of other commodities.

And of course at the bottom of it all, there is every likelihood that those at the bottom of the society, the poor and vulnerable, will invariably be the most impacted upon which is the major concern of President Muhammadu Buhari.

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Therefore we cannot do the changes to the price of Premium Motor Spirit (PMS) and not provide for the wellbeing of the ordinary people and secondly, as we speak today, all petroleum products are deregulated except PMS. By implication, the only provision PIA has is around the price of PMS.

However, there is no intention to do it tomorrow, next month or the third but there is a structural engagement that is going on to make sure that things could come with the removal of petroleum subsidy so they don’t affect the ordinary people.

Do we have alternative source of fuel? Do we have cheaper fuel that we can provide? Is there any specific way we are going to transfer the benefits of the subsidy to the other sectors of the economy that will be of much benefit to the ordinary people?

And that is very clear as you can make more roads, build more schools, hospitals, amongst other things instead of spending the money on subsidy.

Sometimes it is very difficult to materialise in terms of value so I can confirm that there is no immediate intention to do this (increase in petroleum price).

Yes there is a long term plan; there is an implementation committee of the petroleum industry which will sit down and take a long term look at this. People should be assured that the government is aware of their concerns.

Neptune Prime: How is the government trying to secure the 20% equity shares of the Dangote Refinery?

GMD NNPC: The first I would like us to understand is that this is a very strategic plan the government has done as regards to this refinery. There is no resource dependent country like us that will allow such massive infrastructure that is clearly hinged on the oil and gas industry to happen without government engagement, this is not possible.

It has many implication, first it is a huge investment, thousands of workers will be employed, it has clear energy security implications because fuel supply, energy supply, is a major security issue in any country so no government will watch and say that it can have an endeavour of this size without having an interest.

There are many ways of intervening, by regulation which is never efficient to regulate commercial activity as it ends up killing those commercial activities. The wiser way is to become a participant, take a seat on the board of these companies so that you will have some influence on the decisions that will be made.

And secondly, when benefits come, you will share. And thirdly and most importantly, you are in a position to determine how much of these products that can come into domestic market as well as determine the price in the market.

It is a viable venture, it is not something that Dangote will like us to do, I can confirm to you that it is at our request after getting appropriate approval from the President that we approached him.

There is this impression in the market that we want to bail out Dangote. if I were also in his shoes (an independent businessman) I will also not agree to this but we know for sure that he is operating in this country and is bound by the policies of any government, particularly of this government to be specific. It is a very viable venture that can break even within three years, maximum five.

The second and concluding part will be published tomorrow.

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