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Over 200 Illegal Refineries Operating In Nigeria – Kyari

The Group Managing Director (GMD) of the Nigerian National Petroleum Company (NNPC) Limited, Mallam Mele Kyari, has hinted that over 200 illegal refineries are operating in the country, even as efforts to reactivate government-owned refineries are yet to yield the desired results.

Kyari  gave this hint when he appeared before the House of Representatives Joint Committee on Petroleum Resources (Downstream), chaired by Hon. Abdullahi Gaya, now investigating the increase in prices of diesel and cooking gas.

While acknowledging that the downstream sub-sector’s situation is undesirable for the country unfortunate the industry expert told the committee that the company was determined to ensure that the refineries work again.

The GMD, who pointed out that many illegal refineries had been destroyed in recent times, also said the NNPC was in the process of doing a quick fix on the Warri refinery.

On the lingering problem of shortage in petroleum supply, Kyari maintained that no one could guarantee the adequacy of petroleum supply as most oil-producing countries are preserving excess volume in their tanks

According to him, the current energy crisis could be partly attributed to the Ukraine and Russia war which, over the past months, have resulted in increase in prices of petroleum products.

The industry top player listed some of the solutions to the current energy crisis in the country as including, restoration of crude oil production, provision of more foreign exchange by the Central Bank of Nigeria (CBN) to oil marketers with massive intervention currently ongoing to see if the issue would be resolved by the end of July and deliver more supply of petroleum products.

He clarified: “At these illegal refineries there are people from all works of life there. Many of these people are completely armed and the community members cannot even report them, they are helpless because if they report them, they will come after them.

“My suggestion this moment is deliver supply, make sure oil marketers are also able to import, and there’s need to engage the CBN to create more dollars, once we do these, dollars will be allocated for the import of AGO, the will also dampen the effects of going to buy dollar in the open market.

“So you can have cheaper dollar and definitely it will affect the price. Secondly, the regulatory institutions, the authority, Consumer Protection Council and NNPC, I suggest we need to sit jointly to see how arbitrage can be managed so that the end-user is not completely exploited”, he added

While ruling out the possibility of returning to the regime of subsidising diesel and LPG, Kyari pointed out that “today countries are toying with subsidy because prices are so high because they don’t think they can manage inflation associated with it.’’

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