The era of fuel subsidy is over in Nigeria, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Malam Mele Kyari has said.
The subsidy removal was announced by the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, while speaking on an Africa Independent Television (AIT) programme on Monday.
Kyari said, “There is no fuel subsidy anymore in Nigeria. It is zero subsidy forever.”
According to the NNPC boss, “There would be no resort to either fuel subsidy or under-recovery of any nature. NNPC will play in the petroleum marketplace, just like another marketer in the space.”
He said that the corporation was proud of the initiative and assured Nigerians of NNPC’s commitment and observance of transparency and accountability in all its transactions.
“But we will be there for the country to sustain the security of supply at market price,” he said, indicating the government was not deregulating the petrol sub-sector, and would still fix prices.
Describing NNPC as a transparent organisation, the GMD said the state oil firm was probably the “only company in the world that publishes its monthly financial and operations reports.”
On the country’s current oil production, Kyari disclosed that as of April 5, Nigeria produced 2.3 million barrels of crude oil, including condensates. He maintained that the plan was for the country to ramp up production to three million barrels per day in the nearest future.
He said Nigeria was endowed with premium crude oil grades supplied to Europe, Asia and India. He added that notwithstanding the COVID-19 pandemic which had affected demand and supply fundamentals, all Nigeria’s export terminals were still in operations.
“The key issue in the crude oil business is market fundamentals of demand/supply. I believe COVID-19 will subside and countries will come back to life.
“I don’t see the oil price going below the 20 dollars we saw last week. I’m certain, all things being equal, the oil price will bounce back,” he added.
The NNPC helmsman assured Nigerians of ample supply and distribution of petroleum products across the country, saying despite the coronavirus pandemic, the corporation had in stock about 2.6 billion litres of petroleum products that could serve the country’s energy needs for the next two months.
He said the NNPC was collaborating with all relevant stakeholders to ensure that the supply and distribution value chain was not disrupted to guarantee energy security for the country, particularly during the current crisis period.
In 2019, it is estimated that over N780 billion was spent on fuel subsidy while in the current fiscal year, N450 billion was provided for in the budget as fuel subsidy expenditure.
While in 2018, Nigeria spent about N722.3 billion on fuel subsidy, according to the Nigeria Extractive Industry and Transparency Initiative.
With the recent sharp decline in the global price of crude oil as a result of the impact of the coronavirus pandemic, Nigeria, for the first time since 2016, reduced the retail price of petrol by N20 to N125 per litre.
Last week, with the further drop of the crude oil price at the international market, the petrol price was again adjusted to N123.50 per litre.