House of Representatives Committee on Finance has commended the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, for providing detailed explanations on some oil industry issues during an interactive session on the 2022-2024 Medium Term Expenditure and Revenue Framework (MTERF) and Fiscal Strategy Paper (FSP).
The Chairman of the House Committee, Hon. Abiodun James Faleke, commended the NNPC GMD for providing an in-depth explanation and insider perspective on some issues surrounding the operations of the NNPC and the Oil Industry saying: “You have made our day. The committee is better informed based on explanations provided by the GMD.”
In his presentation during the session, Kyari provided a base oil price scenario in the medium term as follows: $57 per barrel for 2022, $61 per barrel for 2023 and $62 per barrel for 2023, adding that the assumptions were arrived at after a careful appraisal of the three-year historical dated Brent Oil Price average of $59.07 per barrel premised on Platts Spot Prices.
He expatiated: “Price growth is to be moderated by the lingering concerns over COVID-19, increased energy efficiency, switching due to increased utilization of gas and alternatives for electricity generation. These are reflected in the Medium Term Revenue Framework.’’
On the lingering problem of smuggling of petroleum products out of the country, the GMD solicited the collaboration of the National Assembly with the Corporation in battling the menace, pointing out that based on the directive of the President, the corporation has strengthened its relationship with relevant agencies like the Nigeria Customs Service, the Economic and Financial Crimes Commission (EFCC), the Police, Civil Defence Corps and others, to find workable solutions to the menace.
He also told the lawmakers that though the corporation in the past mulled the idea of establishing NNPC retail stations in neigbouring countries to curb the challenge of illegal haulage of petroleum products across the border, but that the idea was dropped when it was found that doing so would be counterproductive.
Specifically, he explained that the idea of establishing NNPC Retail stations in neighbouring countries was jettisoned since investing in such outlets outside Nigeria’s shores would not yield the desired result since the people who take products across the border are not interested in selling at the official prevailing prices at approved stations but are interested in below-the-counter deals.
In addition, Kyari further explained the corporation’s planned 20% equity shareholding interest in Dangote Refinery, noting that the investment idea which was mooted by the corporation and subsequently approved by the Federal Government is going to guarantee national energy security.
According to him, the equity interest was approved by government after due consideration of the national interest and best possible options.
The GMD clarified: “We will have right to 20 percent of production from this facility. We structured our equity participation on the basis that the refinery must buy at least 300,000 barrels of crude oil per day of our production.
“This guarantees our market at a period when every country is struggling to find market for their crude oil”, Kyari added.
