The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, has mentioned the value of petrol needs to be greater than N280 per litre, the speed at which Automotive Gas Oil, also referred to as diesel, is being offered.
According to Kyari, Nigeria stays the one nation on the earth the place the value of diesel outweighs that of petrol.
He made this recognized on Tuesday, throughout a programme on Channels Television.
Kyari cited the actions of smugglers who take petrol from the nation as an obstacle to the nation’s oil sector.
The NNPC boss mentioned despite the fact that petrol evacuation by NNPC in Nigeria is at the moment about 60 million litres day by day, the company is definite that consumption is lower than that quantity.
He blamed smuggling for the large consumption quantity, describing the low petrol value of N162/litre as additionally an incentive for this.
He, nevertheless, mentioned it might not immediate one other closure of the borders, noting that the federal government had intensified efforts at curbing smuggling.
Kyari mentioned, “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.”
Kyari mentioned the deliberations between the federal government and the organised labour on petrol value had not been concluded and will drag past subsequent July.
He mentioned negotiations on the price of petrol must be concluded to allow the federal government to impact a change in the price of the commodity.
While answering questions on NNPC’s proposed acquisition of a 20 per cent stake in Dangote refinery, Kyari mentioned the company was borrowing to purchase the stake within the refinery as a result of the refinery enterprise is viable and sustainable.
The NNPC had introduced in May that it was in superior talks with Dangote Industries to accumulate a 20 per cent stake within the 650,000 bpd refinery.
Kyari mentioned authorities cash wouldn’t be used for the stake acquisition.
He mentioned, “We are borrowing on the back of the cash flow of this business. We know that this business is viable, it will work and it will return dividends.
“It has a cash flow that is sustainable because refinery business, in the short term, will continue to be sustainable. That’s why banks have come forward to lend to us, so we can take equity in this.
“There is no resource-dependent country that will watch a business of this scale, which is bordering on energy security and has implications for fiscal security of the country, and you don’t have a say. And for us, as a strategy, we started this process long before Dangote started his refinery project.”
According to Kyari, the NNPC takes fairness in very vital companies which might be anchored on the oil and fuel operations: fertiliser, methanol crops, modular refineries and others.
He mentioned the Dangote refinery would begin manufacturing by 2022, including that it might ship over 50 million litres of petrol into the Nigerian markets.
He mentioned, “We are also working on our refineries, to ensure that we fix them. We have awarded the contract for Port Harcourt refinery rehabilitation. And ultimately we are going to close that of Warri and Kaduna very soon in July so that all of them will work contemporaneously.
“The net effect is that you are going to have an environment where Nigeria becomes the hub of petroleum products and supply. It’s going to change the dynamics of petroleum supply globally in the sense that the flow is coming from Europe today and it is going to be reversed to some other direction.”
He added, “So the meaning of this is, there is an opportunity that has been thrown at us. And I’m not sure Mr Dangote wants to sell his equity in the refinery.
“I can confirm that it was at our instance that we started this engagement. He did not want to sell his shares in this refinery.”