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The Nigerian National Petroleum Company (NNPC) Limited says it has stopped importing refined petroleum products.
Mele Kyari, Group Chief Executive Officer (GCEO) of the oil firm, said this at the 42nd Nigerian Association of Petroleum Explorationists (NAPE) annual international conference and exhibition in Lagos.
Delivering his keynote address, Kyari said the national oil company is now off-taking fuel from the Dangote Petroleum Refinery and other local refineries.
“Today, NNPC does not import any product, we are taking only from domestic refineries.
Addressing rumors that NNPC is obstructing refining efforts at Dangote Refinery, he said, “The point is very far from it and I’m going to speak to it straight. We are very proud part-owners of Dangote refinery, no doubt about it.
“We saw an opportunity that there is a clear market for at least 300,000 barrels of our production; we know that as time moves on, people will start struggling to find markets for their production.
“It will happen, It’s already happening. Oil is found, as you know, in many unexpected locations across the world and people have choices.
“Therefore, we saw an opportunity to log supply to the domestic refinery, not just Dangote but any other refinery that operates in the country, so it was a very informed business decision.
“Therefore, from day one, we knew that it is to our benefit to supply crude oil to the domestic refinery, so we don’t need to be persuaded; we don’t need anyone to talk to us, there is no need for any pressure from the streets for us to do this. We are already doing this.”
He also spoke on the call for Nigeria to domesticate its oil, saying Nigerian crude is “Lamborghini crude”, so the products would be pricey, adding that the issue of high-quality fuel is relative.
“We should never forget that Nigerian crude is ‘Lamborghini crude’, if we choose that every product that we have in this country must come from domestic production, then we must deal with pricing.”
“Otherwise, out there in the global market, everybody buys Nigerian crude and blends it with dirtier crude to process, a lot of you will confirm this.
“So, no one takes Nigerian crude except one or two refineries that I know. Straight processing of Nigerian crude, nobody does this, because you do have a gap in value if you do this.
“Therefore, as a country, and I believe this strongly also, that we must process all the crude that we produce in the country to the optimum. You can do intermediate products and sell to the market, you are still adding value. You don’t have to sell gasoline that is coming from Nigerian production.
“You can do something different so you can process it domestically, but it’s going to be high quality. As we all know and it’s very clear in the media that we are selling high-quality products, that’s very true but you need not do this.
“You are driving a Keke-Napep and you want Lamborghini fuel, you do not need it. So, the quality issue is a relative thing, it’s by geography, by location, and we will do everything possible to make sure that we domesticate this,” he said.
Kyari also denied claims that the company did not want to sell crude to Dangote in naira in attempt to sabotage the refinery.
“There are too many claimants out there, that the NNPC does not want to sell crude to the refinery in naira as a form of sabotage. Far from it!” he said.
“It makes no difference to us because if you sell crude to the domestic refinery in naira and you buy the product in naira from the domestic refinery, it’s a net zero gain. You lose nothing, you probably gain nothing.
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“Otherwise, whatever you do, you still have to source foreign exchange to import if you have to import.
“So, if you stop the import and sell in naira, what you are simply doing is just a substitution. It’s a settlement platform and we must commend the President for bringing this initiative.
“What it will do to our country is that the biggest source of FX pressure in our country is the import of PMS. It’s the highest value.
“That means if you can take that under control, it means that speculation around the naira to the extent of those FX that is required for domestic product supply will be eliminated.
“That means speculation will go, you would have controlled inflation, and you would have controlled the FX pressure because we would have settled the exchange rate for 50 percent of your imports. This is a very great initiative.”
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