Nigerians should be paying at least N256 per litre for petrol, Mele Kyari, the Group Managing Director of Nigerian National Petroleum Corporation (NNPC) said on Wednesday.
Mr Kyari disclosed this at a stakeholders meeting organised by the NNPC to stop fuel smuggling.
Commenting on the current PMS and subsidy payment, Mr Kyari noted that the petrol pump price should be N256 per litre given the current exchange rate.
“If we are to sell at the market today at the current exchange rate, we will be selling the product at about N256 to a litre. What we sell today is N162, so the difference is at a cost to the nation,’’ he said.
According to him, the country cannot sustain subsidy payment with the high volume of daily consumption, pointing out that the country coughs up N150 billion every month on subsidy.
The NNPC boss further explained, “As long as we don’t regulate volume until we are able to exit this current level, which I know so much work is going on, then we have to manage the volume that we are exposed to between this price of N162 and N256. The difference comes back to as much as N140 billion to N150 billion cost to the country monthly.
“As long as the volume goes up, that money continues to increase, and we have two sets of stress to face: the stress of supply and stress of foreign exchange for the NNPC. We may not see foreign exchange cheque taking place for importation.’’
BREAKING: After 20 Years Of Foot-Dragging, Lawmakers Finally Pass The PIB Bill
The House of Representatives on Thursday passed the Petroleum Industry Bill.
Members unanimously passed the 319 clauses of the report of the bill to make history.
The PIB had spent about 20 years at the National Assembly, failing to be passed by previous assemblies before the House passed it on Thursday.
By Thursday’s development, the third reading of the bill will be a mere formality soon to be done by the House.
Reacting to the action of the House, the Speaker, Rep. Femi Gbajabiamila, described it as a “landmark achievement.”
The speaker commended the 74 members of the PIB committee and the entire House for a job well done.
He said, “I want to use this opportunity to underscore the point made by Hon. Monguno. It is to underscore how big what this House has just done today is. It has been 20 years in coming.
“I want to commend the 74 Wisemen, who produced this piece of legislation and who have become the voices of all 360 members.
“This 9th Assembly will be recorded on the right side of history.”
The speaker used the opportunity to restate that even the Electoral Act (amendment) Bill would be passed in the next few days.
Giving a synopsis of the report earlier, the Chairman of the Ad-hoc Committee on PIP, Rep. Mohammed Monguno, recalled how the bill suffered “several postponements at the National Assembly.”
He spoke further, “This bill is about our economy and it beholds on us members of 9th House so that our names will be written in gold.”
Monguno gave the highlights of the PIB, one of which is the provision of a Governance Structure for the petroleum and gas industry in Nigeria.
He explained that this would mean the unbundling of the Nigerian National Petroleum Corporation to “Metamorphose to NNPC Limited to be run as a commercial entity.”
Monguno also said the bill created a Commission to oversee the operation of the industry by ensuring transparency of all transactions.
He added that another provision of the bill is the creation of a Host Community Fund to take care of the interests of oil-bearing communities.
A frontier exploration agency is also established in the PIB to continue with oil exploration activities in other parts of the country.
Petrol Pump Price Should Be N256 Per Litre — NNPC
Mele Kyari, group managing director (GMD) of the Nigerian National Petroleum Corporation (NNPC), says the cost of premium motor spirit (PMS), better known as petrol, should be N256 per litre at filling stations.
Speaking in an interview with Channel Television on Tuesday, June 29, Kyari said the price increase is necessary if NNPC is to recover the landing cost of fuel importation into the country.
Kyari said the petrol pump price is meant to reflect the current crude oil price which stands at $74.40 per barrel at the international market as at 09:23 GMT on Wednesday.
According to him, “Today we are paying N162/litre (for petrol). I am sure many people buy AGO (diesel) in the market and it is selling at N280/litre in the market today.
So (there is) nowhere in the world diesel sells more expensive than PMS. That means that the price of petrol anywhere in the world, assuming you are going to sell it at the market, you are going to sell it above that price you have seen.
Today, from what I can remember, I checked the number two days ago; what would we sell if we are at the filling station today and recover our cost fully is around N256/litre.”
The NNPC GMD said the federal government is still in talks with the Nigerian Labour Congress (NLC) for negotiations on the cost of petrol. He said based on the ongoing engagements, there will be no fuel price increase in July.
Local Content-buoyed Oil Companies See Expansion Amid Capacity Growth
Witnessing the various projects being undertaken by the fast-growing number of indigenous oil and gas companies in the country might have been an illusion some decades ago. But with the success of the Nigerian local content act, more companies, now key players in the sector, are looking to grow their participation as a result of the growth in their capacity and expertise.
The Nigerian oil and gas space has seen astronomical growth of local players buoyed by the various initiatives of the Federal government and the Nigerian Content and Development Monitoring Board (NCDMB), the watchdog, in ensuring that the International Oil Companies (IOC’s) do not impede local capacity development by infringing on any of the local content acts.
The success of the local content policy is why the Nestoil Group is a known name in the Nigerian business environment as its impacts in the sector with record time projects execution and quality of work done are pivotal to the growth of the national economy.
Nestoil, with Group Managing Director/President, Dr. Ernest Azudialu Obiejesi at the helm, before the 2010 Act, had envisaged that a time will come when the various issues militating against local players participation in the oil and gas sector will be addressed. It thus, positioned itself, through sister companies, dubbed Strategic Business Units (SBUs) as demanded by prevailing circumstances, to service end-to-end activities of the sector.
The activities of Nestoil and its subsidiaries like Energy Works Technologies (EWT), IMPaC, B&Q Dredging, HammakoppConsortium, Scorpio Drilling, Neconde Energy, Nesthak, Shipside Drydock, Gobowen E&P, and Century Power Generation Limited – in the energy ecosystem has led observers to call it the local content success story.
The various well-equipped SBU’s, fuelled by the local content act, were created at different fora during the evolution of the oil and gas sector, according to Azudialu-Obiejesi, upon the identification of insightful business opportunities from needs that did not have readily available or sufficient in-country solutions.
On the company’s website, he said the SBUs were initially created to provide for critical needs that arose during Nestoil’sexecution of various pipeline construction projects it got from local and foreign partners. These companies, presently, he enthused have been expanded and have become authorities in their fields.
Through the execution of various projects, the expertise and technical know-how of Nestoil and its staff have greatly improved that it is trusted by IOC’s and local partners to deliver on its mandate, no matter the tough terrain where the projects are located.
Its level of success today can be tied to the determination of its founder, Azudialu – Obiejesi, even before the passage of the Local Content Act, to have business entities that would be wholly Nigerian to compete with the IOCs. The predicator to this was to allow Nigerians to participate and be major players in the sector.
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