… says over 200 illegal refineries operating in Nigeria
The Group Managing Director (GMD) of the Nigerian National Petroleum Company (NNPC) Limited, Mele Kyari, has revealed that over 200 illegal refineries are operating across the country, with no government-owned refinery working at the moment regrettably.
Kyari said this when he appeared before the House of Representatives Joint Committee on Petroleum Resources (Downstream), investigating the increase in prices of diesel and cooking gas.
Kyari who acknowledged that the situation was quite unfortunate in his address to the committee chaired by Hon. Abdullahi Gaya, pointed out that NNPC was doing something to make sure the refineries work again.
While noting that a good number of illegal refineries had been destroyed, he said the NNPC was in the process of doing a quick fix on the Warri refinery.
On petroleum supply, the GMD stated that no one could guarantee the security of petroleum supply, as countries are preserving excess volume that they have in their kitty.
Kyari attributed the current energy crisis to the Ukraine and Russia war which resulted in the increase of petroleum product.
He said the solution to the current energy challenges include restoration of crude oil production, provision of more foreign exchange by the Central Bank of Nigeria (CBN) to oil marketers with massive intervention currently ongoing to see if the issue would be resolved by the end of July and deliver more supply of petroleum products.
The NNPC boss explained, “Community members are not the thieves, absolutely not. Everything we are doing is to incorporate the communities into the process of protecting these assets.
“The National Assembly in its wisdom also included Trust Fund for the communities in the Petroleum Industry Act (PIA) so that they become parts and parcel of the system.
“Criminals in the Niger Delta come from all parts of the country. At these illegal refineries there are people from all works of life there.
“Many of these people are completely armed and the community members cannot even report them, they are helpless because if they report them, they will come after them.
“My suggestion this moment is deliver supply, make sure oil marketers are also able to import, and there’s need to engage the CBN to create more dollars, once we do these, dollars will be allocated for the import of AGO, the will also dampen the effects of going to buy dollar in the open market.
“So you can have cheaper dollar and definitely it will affect the price. Secondly, the regulatory institutions, the authority, Consumer Protection Council and NNPC, I suggest we need to sit jointly to see how arbitrage can be managed so that the end-user is not completely exploited.”
Speaking further, Kyari ruled out the possibility of returning to the regime of subsidising diesel and LPG.
He said, “Today countries are toying with subsidy because prices are so high because they don’t think they can manage inflation associated with it.’’
Recall that the Russia-Ukraine war has led to a serious energy crisis across the world with petroleum products and gas supply disruptions and a rise in crude oil prices to over $120 per barrel.
Nigeria’s problem is further exacerbated by the lack of local refining capacity and even scarcity of foreign exchange to import these products.
This has in recent times led to an astronomical rise of the retail price of diesel to above N800 per litre.
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