Leveraging on the low price of crude oil and petroleum products, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr Mele Kyari, on Monday announced that the era of subsidising the pump price of petrol was over.
He made the disclosure on the official Twitter handle of the NNPC after he appeared in a television interview.
Kyari said: “As at today, subsidy/under-recovery is zero. Going forward, there’ll be no resort to either subsidy or under-recovery of any nature. NNPC will just be another player in the market space. But we’ll be there for the country to sustain security of supply, @ the cost of the market”.
As crude oil price slumped in the international market due to the COVID-19 pandemic, the Federal Government responded by reducing the pump price of petrol from N145/litre to N125/litre in March.
It further reduced the price to N123.50/litre on April 1, after monitoring developments in the international oil market.
On the possibility of suffering another round of petrol scarcity, he said; “Today, we have a very robust products supply and distribution mechanism; from the loading depots up to fuel stations nationwide.
“We also have very good understanding with our strategic partners: the governors, marketers, depot owners, PTD, among others. There are no issues whatsoever.”
On the current developments in the international market, the NNPC boss said: “The key issue in 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 oil price going below the $20 we saw last week. I’m certain, all things being equal, oil price will bounce back”.
He pointed out that the desire of the national oil company was to grow Nigeria’s production to 3 million barrels per day.
“As at yesterday, our production has, for the first time in many years, risen to 2.3 mbpd. We believe this will grow and the contribution of local companies in this regard will be meaningful.”
On gas, the NNPC boss said there were ongoing plans to aggressively expand the domestic gas footprint with the delivery of the Escravos-Lagos Pipeline System (ELPS) II to double capacity from 1.1billion standard cubic feet of gas (BSCF) to 2.2BSCF and the OB3 gas pipeline to connect East and the West.
The NNPC, he revealed, would commence the construction of the Ajaokuta-Kaduna-Kano gas pipeline in the second quarter of 2020 to serve as an enabler to further boost the economic activities of the country.