The Group Marketing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, has dismissed the criticism that followed the recent fuel price increase.
“The outburst is very understandable but I also believe very strongly that it is misplaced because Nigerians are not aware of the opportunities lost,” he said during an interview on Wednesday.
According to Kyari, the issue of subsidy has been a big issue in the country for many years but the government can no longer afford it because of the economic issues facing the country.
“And not only that, every corruption that you are aware of in the downstream industry is one way or the other connected to fuel subsidy,” the NNPC boss added.
Kyari is the latest government official to defend the decision to fully halt subsidy, a decision that saw the price of fuel surge from N48/litre to N60-61/litre drawing criticism from organised labour, the opposition and many Nigerians.
But the NNPC boss insists it is the right decision.
“It requires courage to make this decision, I can share this with you. Only a Buhari regime can make this decision,” he said, insisting the move would pay off in the long run.
According to the NNPC boss, contrary to what most people believe, subsidy is something that is beneficial only to the rich, not the average man.
“The subsidy in itself, is by every means an elitist thing and I can share this with you. It is only the elite that will have three, four, five cars in their houses, fill their tanks and also feel comfortable doing this.
“The ordinary man is not the beneficiary. First, he loses in infrastructure, hospitals are not built, schools are not built and ultimately, the brunt of the corruption in the downstream sector will be transferred to the ordinary man. So, overall, you lose everything.
“It is very understandable for people to get angry that prices have gone up. Just like the prices of every commodity, when it goes up, there can be difficulties and challenges that people will naturally face but once prices go up, the other natural thing that must happen is that your income needs to increase so that you are able to procure the things that are now delivered at higher prices.
“You can’t do this anywhere in the world if there is no productivity.
“And there will be no productivity except there is growth in infrastructural development, industries are able to work, therefore, there is a connection between production and consumption. What subsidy does is to remove that connection.
“When people get angry, this is coming from people who, practically are not aware of this situation and they are not aware of the loss that they have and most importantly they are being engineered into making those statements, and we understand this perfectly.
“We are the national oil company, it’s our role to ensure energy security. But you can’t do this until you are able to deliver cost. And that cost is lost daily as prices of crude oil goes up and you are unable to do many things”.
Plans for refineries
On the state of the nation’s refinery, Mr Kyari explained that plans are on the way to rehabilitate the four major refineries to maximum capacity.
According to him, this plan is expected to place Nigeria as the world’s biggest exporter of oil in the next three years.
Fuel price was increased on Wednesday last week for the second time this year after being reduced to N123.50 in April as coronavirus-induced lockdowns crashed global oil prices.
As economies across the world reopened and the price bounced back, the retail price in Nigeria shot back up to N148 in August before the latest increase.
Although the increase in fuel price has sparked outrage with various groups holding nationwide protests across the country, the Federal Government has stood by its decision.
On Tuesday, the Petroleum Products Pricing Regulatory Agency (PPPRA) said it was no longer going to be releasing price bands for the sale of Premium Motor Spirit (PMS/petrol) at filling stations.
The agency reiterated that the price will now be fully based on the forces of demand and supply.
“It is based on bargain power,” the General Manager (Admin and Human Resources) of the PPPRA, Victor Shidok, said. “It is based on where you source your products.”
However, he noted that the government will ensure customers are protected from price-gouging and other ills associated with free markets.
“You could have a regulator that always stand and remain a watchdog to see how these forces are being played out, how the interest if both operators and consumers are being taken care of,” he said.