State oil firm, the Nigerian National Petroleum Company (NNPC) Limited, says it has not stopped the importation of petroleum products into the country.
Olufemi Soneye, NNPC spokesperson, who disclosed this in a statement on Thursday, said the state-owned petroleum company would still source for products from outside the country when there is a need for that.
Soneye confirmed that the Group Chief Executive Officer of the NNPC, Mele Kyari, said at the Nigerian Association of Petroleum Explorationists conference that the company is not importing fuel anymore but taking from local refineries.
While saying Kyari’s statement was correctly quoted in the news report, Soneye said the GCEO, who spoke extempore for several minutes, was misinterpreted.
According to him, “The GCEO’s statement, ’Today, NNPC does not import any product; we are only taking from domestic refineries’, should not be construed to imply that NNPC Ltd is obligated to be the sole off-taker of any refinery or that we will no longer import fuel. While NNPC prioritises sourcing products from domestic refineries, this is contingent upon economic viability. If local supply is cost-effective, it will be preferred, but the same principle applies to other marketers, who will also evaluate total costs when deciding whether to buy locally or import.”
According to Soneye, economic viability will guide NNPC Ltd in its decisions on whether to source refined petroleum from local refineries or import, noting that Kyari has not announced the end of fuel importation.
He added, “It is also essential to note that the authority to grant import licenses resides with the Nigerian Midstream and Downstream Petroleum Regulatory Authority, as mandated by the Petroleum Industry Act. NNPC Ltd does not have control over more than 30 per cent of the market, as stipulated by the PIA, which aims to prevent monopolies.
“The law promotes a free-market system where competition drives efficiency and cost reduction, ensuring that consumers benefit. Domestic refiners must compete on price and value, as patronage cannot be legislated in a deregulated sector.”
He commended the newspaper for accurately reporting that NNPC Ltd was making significant investments in Compressed Natural Gas infrastructure as part of its broader energy security and affordability initiatives.
While speaking at the conference on Monday, Kyari said, “There are too many claimants out there, that the NNPC does not want to sell crude to the refinery in naira as a form of sabotage. Far from it! It makes no difference to us because if you sell crude to the domestic refinery in naira and you buy the product in naira from the domestic refinery, it’s a net zero gain. You lose nothing, you probably gain nothing. Otherwise, whatever you do, you still have to source foreign exchange to import if you have to import. So, if you stop the import and sell in naira, what you are simply doing is just a substitution. It’s a settlement platform and we must commend the President for bringing this initiative.
“What it will do to our country is that the biggest source of FX pressure in our country is the import of PMS. It’s the highest value. That means if you can take that under control, it means that speculation around the naira to the extent of those FX that is required for domestic product supply will be eliminated. That means speculation will go, you would have controlled inflation, and you would have controlled the FX pressure because you would have settled the exchange rate for 50 per cent of your imports. This is a very great initiative. I should commend the President for bringing this initiative,“ he stressed.
Leave a Reply