After years of heavy importation of petroleum products, the Nigerian National Petroleum Company Limited, NNPC, announced on Monday that it has call a quit to the long-standing practice.
This comes after the Independent Petroleum Marketers Association of Nigeria, IPMAN, had earlier announced its plans to purchase products directly from the $20 billion Dangote facility.
Mele Kyari, the Group Chief Executive Officer of NNPC, made this announcement in Lagos during his keynote address at the 42nd annual international conference and exhibition of the Nigerian Association of Petroleum Explorationists, NAPE.
Kyari hammered on NNPC’s role as a proud co-owner of the Dangote Refinery, noting that the company recognized the $20 billion refinery as a significant market for at least 300,000 barrels per day of its production, helping to navigate the challenges of a shrinking crude oil market.
“Oil is found in very many unexpected locations across the world and people have choices. And therefore, we saw an opportunity to now supply to not just Dangote, but every refinery that operates in the country.
“So, it’s a well informed business decision. Therefore, from day one, we knew that it was to our benefit to supply crude oil to domestic refineries.
“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”, Kyari stated.
He also disclosed that NNPC has ceased importing refined petroleum products, aligning with the company’s commitment to support local processing of all crude produced in Nigeria.
Kyari stated: “And therefore, I believe strongly also that we must process all the crude that we produce in the country up to the optimum. And we will do everything possible to make sure that we domesticate this. And today, NNPC does not import any product. We are taking wholly from the domestic refinery.”
Kyari highlighted that the company is collaborating with the federal government to address pricing issues, which arise from sourcing all feedstock supplies from the domestic market.
The NNPC boss further stressed the implications of the pressure on Nigerian oil producers to supply crude to local refineries and in naira.
Nigerian crude is a premium type that commands a premium price, he noted.
In the global market, he explained that refiners buy Nigerian crude to blend with their heavier crudes for processing.
He added that only a few refineries are willing to process Nigerian crude directly due to its high cost and premium nature.
Kyari also dismissed claims circulating that the NNPC is unwilling to sell crude to domestic refineries in naira, labeling such assertions as sabotage.
He reminded other oil producers that the domestic crude oil obligation applies to both NNPC and them, emphasizing that they must supply crude to the four NNPC refineries once they resume production.
Kyari clarified that selling crude to local refineries in naira does not equate to a loss of product value; rather, it simply removes the foreign exchange gap, which will help strengthen the local currency and boost the country’s economy.
Additionally, he revealed that NNPC has successfully settled its long-standing cash-call debt of $2.4 billion owed to International Oil Companies operating in Nigeria.
He confirmed that the company is now free of any outstanding debts, highlighting that this significant achievement was accomplished after all subsidies were completely eliminated.