The Group Managing Director (GMD) of Nigerian National Petroleum Corporation (NNPC), Malam Mele Kyari has said there was no plan to increase the official pump price of Premium Motor Spirit (PMS), otherwise known as petrol, from N162 in July.
Speaking on Channels Television on Tuesday, he, however, noted that engagements were still ongoing with the Organised Labour to arrive at the appropriate price of the petroleum product, stating that until both parties arrive at a conclusion, the current price remains.
According to him, President Muhammadu Buhari instructed the corporation not to make petrol price out of reach of Nigerians, “especially at this moment”.
“What this means, however, is that we are taking out cash that could have been used for other things to pay under-recovery”, he said.
He revealed that Dangote refinery being constructed in Lagos State would commence operation this year and explained why the NNPC is purchasing a stake in it.
Mr Kyari argued that the decision was also driven by the profit potential of the refinery business.
According to him: “There is no resource-dependent country that will watch a business of this scale, which borders on energy security and has implications for fiscal security of the country, and you don’t have a say.”
He also clarified misconceptions about the source of the loan, stressing that it wasn't from government coffers.
“For the Dangote refinery, we are not taking government money to buy it, which is the mistake that people are making,” he said. “We are borrowing on the back of the cash-flow of this business.
“We know that this business is viable, it will work and it will return dividends. It has a cash-flow that is sustainable because refinery business, in the short term, will continue to be sustainable.
“That’s why banks have come forward to lend to us, so we can take equity in this."
What you should know
In May, the NNPC announced that it plans to acquire a 20 percent equity stake in Dangote oil refinery.
The refinery is expected to begin production in 2022 with an installed 650,000 barrels per day capacity.
It has been touted as a groundbreaking project for energy security in the country and for the African continent.
