Why 70% of PMS in West Africa originates from Nigeria- Kyari
The gaps over control of distribution and sale of Premium Motor Spirit, PMS, in Nigeria continue to deepen as over 70 per cent of petrol consumption across West Africa originates from the country.
Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Malam Mele Kyari, said only 30 per cent of the product comes from about 13 West African countries, making it almost impossible to stop cross border sale of petrol in Nigeria.
Kyari, who spoke in Abuja at a media parley with Energy Correspondents Association of Nigeria, said many West African countries were unable to import petroleum for lack of foreign exchange to support it.
He explained that the countries were depending on Nigeria’s petrol because no taxes are placed on petroleum products in the country, making fuel cheaper than its West African counterparts.
He said in neighbouring Niger Republic, petrol is currently selling at the cost of over N464 per litre while Nigeria sells at N168 per litre, about N300 cheaper than Niger.
According to him, other factors responsible are distance and deliberate attrite, adding that the company was working with security agencies to minimize cross border sales of the product.
Speaking on the deregulation, he said the decision to fully deregulate the petroleum downstream sector was a difficult one for President Muhammadu Buhari to make in view of the attendant suffering that it would inflict on ordinary Nigerians.
He said due to the challenges presented by Covid-19, the country can no longer afford to fund subsidy as it does not have the money to do so, adding that there is no provision for subsidy in the 2020 appropriation account and that of 2021.
“His main concern was that this will bring pain to the ordinary people, and the only argument we had was that we don’t just have the resources. Today, you know that with covid-19, things have changed, we can no longer afford it (petrol subsidy),” he said.
Kyari said today, as a result of deregulation, Nigerians have, access to purchase bulk PMS from the comfort of their homes as they can log on to the NNPC portal and buy the products, and have the products delivered to their choice destinations.
He stated that the removal of subsidy helped the corporation to turn its attention to a number of things, including its new focus on gas development, which he described as the most resilient source of energy, adding that it is the only oil and gas business that survives in very marginal changes as observed during the Covid-19 lockdown.
Kyari said the biggest challenge in the country was to take electricity to homes and industries using the resources the country has to create the energy it needs.
The NNPC boss lamented that the country was not meeting its high demands for electricity because its production of electricity is low and the country was not able to fully transmit and distribute what is produced, stating that gas is the only solution at hand to ensure that enough electricity is produced and distributed to homes.
He described Nigeria as a gas nation rather than a petroleum one, adding that the country has over 200 trillion proven stock of gas and potentially over 600 trillion cubic feet of gas reserve, adding that focus was being placed on gas production for domestic and export utilisation.
While assuring that NNPC will become an energy efficient company of excellence, he pledged the corporation’s commitment to deliver dividends to the people, noting with optimism that by the end of December 2020, the company will declare dividends to Nigerians.
On the upstream sector, he said the upstream target was to reach 3 million barrels per day, but the company was able to achieve 2.49 barrels per day, adding that the last time Nigeria was able to produce that much was 15 years ago.
He said the 3 million barrels per day was within sight and but not for the covid-19 pandemic, the country would have long closed the gap of 450 barrels.
Speaking on the impact of the covid-19 pandemic on the petroleum industry, he said it has been projected that by the end of 2020, the global net loss by the industry will be about a trillion dollar.
Kyari however noted that throughout the pandemic, while companies were looking for bailouts from government, NNPC was able to maintain its obligation to the federation account for seven months.
While commenting on institution of transparency in the corporation, he said NNPC is the only company that publishes its financial operations monthly, adding that the company lost about N803 billion in 2018 and was not afraid of publishing it.
“You also recall that we published the 2019 audited financial statement of the company. It showed that we have learnt from our mistakes of 2018; that we have cut down our cost; that we have improved our operations; we have become more efficient,” he said.
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