Nigerian National Petroleum Company Limited, Mele Kyari, has justified the company’s present monopoly in fuel importation by claiming that oil marketers pulled out of the fuel import market as a result of price volatility.
The Punch reported that speaking on Wednesday at the National Assembly complex before the Senate Committee on Finance, Kyari claimed that oil marketers chose not to import because they were unable to handle price fluctuations in the downstream industry.
The private depot owners, also known as the Depot and Petroleum Marketers Association of Nigeria, the Major Marketers Association of Nigeria, and petroleum marketers operating under the auspices of the Independent Petroleum Marketers Association of Nigeria have purportedly boycotted fuel importation because of exchange rate volatility.
Although his company had a monopoly on the import of petroleum, the GCEO of NNPCL told the parliamentarians that everything was well in the downstream sector, thus he downplayed the worries.
“The oil companies pulled out because they couldn’t handle the volatility and accountability that the Petroleum Industry Act placed on us. We do have the market, and we are handling it, I promise,” he stated.
He continued , “One of our sellers also purchase from us. However, there is one thing we are powerless over. For example, truck owners are free to change their prices; we have no say in it.”
Kyari went on to say that there was no need to be concerned about the foreign exchange market distortion that the marketers alleged discouraged them from entering the fuel importation sector.
He went on to say, “I am very confident that by the end of the first quarter of next year, those margins will narrow and stability will come and you will see others coming into the importation market.”
The NNPCL has stated that the budget for 2024 includes realistic and achievable estimates for crude oil production and a price benchmark of $77.96.
The guarantee was provided by the Chief Executive Officer of NNPCL Group, Mr. Mele Kyari, during a Wednesday interactive meeting with the Senate Committee on Finance at the National Assembly in Abuja.
In a statement issued by the NNPCL’s Chief Corporate Communications Officer, Mr. Olufemi O. Soneye, Kyari stated that it was improbable that prices would fall to $70 per barrel; yet, he added that prices could oscillate.
“It is quite improbable that the price of oil will reach $70 per barrel given the state of the market both now and in 2024, let alone in the years beyond. In general, benchmarks are averages; you can occasionally see prices drop to $75 per barrel and rise beyond it, but overall, we are witnessing fluctuation. We believe that the $77.96 plan made by Mr. President can still be implemented in 2024.”
Regarding the estimated production of crude oil, he said, “We have 1.785 million barrels per day.” This represents the total amount of oil produced in the nation. This amount includes the production of condensate and crude oil as well as all other products.
“This clarification is necessary due to the reports in the media that our OPEC quota is 1.5million barrels per day. The OPEC quota is related only to crude oil. We also do between 250,000 to 300,000 barrels per day of condensate in our production. When you combine the two, the 1.78mbpd is realistic and realizable.”
