Removal of petrol subsidy is good for our economy – Kyari

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NNPC Group Managing Director Kyari
NNPC Group Managing Director Kyari

By Anayo Ezugwu

MELE Kyari, group managing director, Nigerian National Petroleum Corporation, NNPC, has defended the removal of petrol subsidy by the federal government. He said the removal was a good development for the Downstream Sector and for the nation’s economy.

In an exclusive interview with Realnews, Kyari said the industry had been agitating for the deregulation of the downstream sector for years. He said the subsidy regime was actually harmful to the market as it created distortions that were responsible for product leakages and arbitrage. “In fact, at a point, Nigeria was almost subsidizing petrol for the entire West African coast. Yet the subsidy was not benefitting the average Nigerian as much as it was benefitting the big men who have multiple big cars. With the removal of subsidy, the huge sums of money that used to be spent for under-recovery is now freed up for the government to use for infrastructural development.

“As to how it is impacting on our downstream business, I can tell you that it is good for us. During the subsidy regime, other marketers could not import products. This made NNPC the sole importer of petroleum products creating a sort of monopoly which was neither good for us nor for the market.

“Now we can import, sell, and make a little profit, while the other marketers are also importing and making profit. This serves as a boost to the general economy. We believe that with time, the market will stabilize and the combination of market forces and the competition will bring down the price of petrol,” he said.

Kayri said the downstream sector, as at this moment, is fully liberalised and deregulated. “If you remember, some months ago the PPPRA used to fix a pump price range for marketers. That has stopped now. This means any marketer can source products from anywhere and sell at any price dictated by the market. How much more liberalized or deregulated can a market be than that?

“As for bridging, I think there is some misconception about it from your question. Bridging is simply the movement of petroleum products from coastal depots to inland depots by trucks because of the unavailability of the pipelines due to vandalism. So, I will say yes, there is a bridging of products. That is the only way we can get products to all parts of the country under the circumstances. I really don’t know how that negates the spirit of liberalization.”

– Oct. 1, 2020 @ 16:37 GMT |

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