.Says NNPC will no longer run refineries
The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, has said that the decision to finally end the fuel subsidy regime is in the interest of ordinary Nigerians.
The NNPC boss said that the removal of fuel subsidy would free up funds for various tiers of government to develop basic infrastructure in the education, health, transport, and other sectors for their benefit.
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In a statement made available to the Daily Times on Wednesday, Dr. Kennie Obateru, the NNPC Group General Manager, Group Public Affairs Division, Mallam Kyari explained that the removal of subsidy would automatically correct the distortions it had created in the market over the years.
He listed the distortions to include products arbitrage and smuggling, adding that the removal would also provide the needed impetus for the NNPC to establish retail outlets in neighbouring countries.
Kyari said that as it stand today in the country, only the elite benefit from subsidy.
“Subsidy is elitist because it is the elite that benefit from it.
“They are the ones that have SUVs, four, five cars in their garages.
“The masses should be the ones to benefit. There are many things wrong with the under-recovery because it makes us to supply more than is needed.
“This makes the under-recovery to be bloated because we unwittingly subsidize fuel for the whole of West Africa. That has to stop,” the NNPC boss submitted.
On the agitation in some quarters for a reduction in the price of kerosene, he said the corporation’s focus was rather on how to migrate all those who were still using kerosene for domestic cooking to the use of Liquefied Petroleum Gas (LPG) which is popularly referred to as cooking gas.
According to him, apart from LPG being a cheaper fuel than kerosene, it is also safer and more environment-friendly.
He said the Minister of State for Petroleum Resources, Chief Timipre Sylva, was championing policies to deepen the adoption of LPG for domestic consumption, adding that widespread adoption of LPG usage was the best solution to kerosene supply challenges in the long term.
On the situation with global crude oil price and supply, the GMD said things were shaping up.
“Crude oil price is improving by the day. Last week, it was $15 per barrel. Today, it is $32.79 per barrel. We believe the ongoing engagements between global oil producers will bring back demand and once that happens, the market will balance and fully recover by year-end”, he stated.
He added that the NNPC will no longer be involved in the management of the nation’s refineries after their rehabilitation.
According to him, upon completion of the ongoing rehabilitation exercise, the services of a company woUld be procured to manage the plants on an Operations and Maintenance (O&M) basis.
“We are going to get an O&M contract, NNPC won’t run it. We are going to get a firm that will guarantee that this plant would run for some time.
“We want to try a different model of getting this refinery to run. And we are going to apply this process for the running of the other two refineries”, he stated.
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