Saturday, September 25, 2021

House Of Reps Lauds Kyari On Revenue Projection

The group managing director, Nigerian National Petroleum Corporation, Mallam Mele Kyari.
The group managing director, Nigerian National Petroleum Corporation, Mallam Mele Kyari.

The House of Representatives committee on finance has lauded the group managing director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, for providing detailed explanations on some burning oil industry issues in the country.

The chairman of the committee, Hon. Abiodun James Faleke, gave the commendation during an interactive session on the 2022-2024 Medium Term Expenditure and Revenue Framework (MTERF) and Fiscal Strategy Paper (FSP) yesterday in Abuja, saying Kyari provided an in-depth explanation and insider perspective on some issues surrounding the operations of the NNPC and the oil industry adding “you have made our day. The committee is better informed based on explanations provided by the GMD.” 

Kyari, in his presentation, 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 2024.

He explained 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. 

“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,” Kyari informed.   

On the perennial issue of smuggling of petroleum products, Kyari implored the National Assembly to come to the aid of the corporation in battling the menace, noting that the corporation, based on the directive of the president, had mobilized some federal agencies like the Customs, the Economic and Financial Crimes Commission (EFCC), the police, civil defence corps and others, to find workable solutions to the menace. 

On the propriety of establishing NNPC retail stations in neighbouring countries to curb the challenge of illegal haulage of petroleum products across the border, Kyari said though the NNPC once considered the option, it had to jettison the idea when it became imperative that the measure would be counterproductive. 

He explained that those smuggling were not looking for officially priced petroleum products, pointing out that going ahead to establish NNPC retail stations would not yield the desired result since the people who take products across the border were not interested in selling at the official prevailing prices at approved stations but were rather interested in under the counter deals.   

The NNPC GMD also took time to provide detailed explanation on the corporation’s equity shareholding interest in Dangote Refinery, saying the package which was at the instance of NNPC was designed to guarantee national energy security. 

A statement by the NNPC group general manager, group public affairs division, Garba Muhammad, said Kyari stated that the equity interest was secured after due consideration of the national interest and best possible options. 

“We will have right to 20 per cent 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,” he explained. 

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