The Federal Government plans to inject about N2.7 trillion into the economy in order to cushion the inflationary effect of the fuel pump price hike.
The Group Managing Director of the Nigerian National Petroleum Corporation, Mele Kyari, made this disclosure at a downstream stakeholders’ meeting which held at the NNPC Towers, Abuja.
Kyari told the stakeholders that the injection into the economy will also help stimulate production and stabilise the exchange rate.
The stakeholders at the meeting include the Major Oil Marketers Association of Nigeria (MOMAN), Depots and Petroleum Products Marketers Association of Nigeria (DAPPMAN), Independent Petroleum Marketers Association of Nigeria (IPMAN), Petroleum Tanker Drivers (PTD), National Union of Petroleum and Natural Gas Workers (NUPENG), and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN).
The Pipelines and Products Marketing Company (PPMC), a subsidiary of the NNPC, had in an internal memo on September 2, 2020, increased the price of petrol from N138.62 per litre to N151.56 per litre.
The NNPC GMD also revealed that the Federal Government spent N2.13 trillion between 2016 and 2019 on subsidising the foreign exchange (forex) for fuel importation by marketers.
The N2.13 trillion spending on subsidy by the government, Kyari noted, is unsustainable and unprogressive.
He disclosed that concrete steps have been taken by the Federal Government to address the main concerns of marketers, especially the issue of availability of forex.
According to him, the Central Bank of Nigeria (CBN) has taken the first step of merging all forex windows to have a unified exchange rate.
“It is really not in our interest to be the sole importer of PMS in the country. We have taken definite steps to exit the situation.
“This is a definite step taken and the details would be communicated to stakeholders like MOMAN, DAPMAN, IPMAN and others outside this forum,” Kyari stated.
He also revealed that in response to the concerns raised recently by members of the Nigerian Association of Road Transport Owners (NARTO) over the state of roads, especially those on the Niger State axis, the Federal Government has commenced aggressive road repair works to allay their fears.
The NNPC helmsman said that measures have been put in place to ensure an adequate supply of petroleum products for the end of year festivities and the projected increase in movement of people across the length and breadth of the country.
He said the Federal Government was keen on driving the deregulation program to create value for the country and ensure that Nigerians enjoy the benefits.
At the meeting, the stakeholders including the MOMAN, DAPPMAN IPMAN, NUPENG and PENGASSAN, commended the Federal Government for its courage to tackle the challenges in the downstream Sector frontally.
The MOMAN President, Tunji Oyebanji, said the Federal Government has displayed utmost pragmatism by applying economic solution to the age-long challenges in the downstream rather than the political solutions applied in the past which were not sustainable.
He commended NNPC GMD for extending the engagement to the leaders of oil workers’ unions who have always been opposed to deregulation and called on them to adopt a different approach to the issues this time around.
“This is the first time we are having NUPENG and PENGASSAN in the meeting. This underlines the style of the GMD, I commend him. We can’t do the same thing over and over again and expect a different result”, the MOMAN president stated.
On her part, the Vice President of DAPPMAN), Amina Maina, said the subsidy regime was of no benefit to anyone and commended the GMD for the engagement.
The stakeholders pledged their support for the efforts of the Federal Government and NNPC to ensure a viable and sustainable Downstream Petroleum Sector.
In his remarks, the Director of the Department of Petroleum Resources (DPR), Sarki Auwalu, who was represented by the agency’s Assistant Director, Depots, Products and Jetties, Mr. Bashir Sadiq, said the government was interested in opening up the Downstream Sector, adding that the DPR was in support of NNPC’s initiatives in the sector.
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