One of the nation’s refineries would be renovated by the end of the year, according to President Bola Tinubu’s government, according to Nigerian National Petroleum Company Limited Group Managing Director Mele Kyari.
Kyari made this statement while visiting the All Progressives Congress (APC) secretariat to meet with Senator Abdullahi Adamu, the party’s national chairman.
The chairman and members of the National Working Committee gave the NNPC helmsman a warm welcome when he arrived at the location about 12.30 pm.
After the discussion, Kyari spoke with the media and made it clear that the president is developing some palliative measures to ameliorate Nigerians’ suffering as a result of the increase in pump prices and their impact on commercial fare.
He also mentioned that repairs are being made in order for one of the refineries to be ready this year.
Kyari said, “I’m aware that Mr president has directed some engagements and some palliatives will be put in place. I am very sure this will happen. There is an ongoing process of rehabilitation. One of them will come this year, the second one will come on stream next year and then the third will follow thereafter.
“Of course, it is very obvious that we can no longer afford subsidies. Subsidy bills have piled up. The country is not able to settle NNPC for the money we are spending on subsidies. Therefore pricing this petroleum at the market price is the right thing to do at this point in time and I believe it would benefit the country in the long term,” he said.
Remember that Tinubu stated that his government could not continue the fuel subsidy during his inauguration on Monday.
He noted that it was no longer justifiable to continue, saying that the Federal Government was having difficulty funding subsidies.
Long lines have returned at fuel stations in Lagos, Abuja, Ilorin, Benin, Asaba, Port Harcourt, Kano, Makurdi, and other important cities and urban regions, and transportation costs have increased by 100% as a result of the situation.
As a result, numerous outlets have shut down and stopped dispensing petrol to cars, which has led to shortages and panic buying at the fuel stations that have opened to the public.
Kyari, however, said audaciously on Thursday that the nation can no longer support such a costly system.
According to him, four states—Lagos, Abuja, Kano, and Rivers—consume more than 38% of the nation’s total petroleum distribution.
He said, “There was subsidy in 2022 but in 2023, not a single naira was provided for the purpose. And ultimately while we held back our fiscal obligations, we still have a net balance of over N2.8trn that the federation should have given back to the NNPC.
“For any company, when you have negative N2.8 trn, there is no company in the whole of Africa that will lend to you. You cannot have receivables. The provision of subsidy is there but absolutely there is no funding for it. It means it is only on paper. It doesn’t exist.
“We can no longer bear it. If we continue, we will run into defaults and the defaults of NNPC is the default of Nigeria. Once NNPC goes into defaults and liquidity, it affects every borrowing done by the country. Even the subnational.
“Your lenders will come back to you and say your country can no longer pay. The only way you can stop this is to stop this conversation around subsidy. It is why Mr President announced that the subsidy is gone. In 24 hours, the bond market appreciated.
“It is nothing else other than the statement around subsidy and balancing of the apex market. These two elements are major concerns that every investor all over the world, and every partner that we have is worried about.
“Before today, the average subsidy level was N400bn every month. There is nothing anybody can do about it. There is this common argument that the masses will suffer. I agree that once you increase prices of this proportion, as it has happened, it will have an impact on inflation.
“There is no doubt about it. The market determines what happens next. Even inflation in very many countries goes up when you have the economic indices become difficult.
“Mr president’s target is to have seven per cent growth of GDP. You cannot have it if you have this disruption in your demands and consumption pattern. Very many of us here have at least two cars in our houses including myself. When you buy fuel of 100 liters in an SUV, you are literally subsidizing three liters with 100 naira for all of us.
“Even the consumption itself is clearly skewed in locations and states where the level of economic activities are higher than the others. It is very understandable and that is why people can afford it in Abuja, Lagos, Port Harcourt, and Kano. So over 38 per cent of the total fuel distributed in this country ends up in these places. All the other parts of the country suffer for it and you can see the relativity. Imagine the per capital basis?”
