Rising from a meeting of its Committee on Finance, the House of Representatives has praised the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari for a job well done.
The NNPC boss appeared before the House committee on Wednesday to clarify the projections made by the corporation for the 2022-2024 revenue framework, Naija News reports.
During the meeting with the lawmakers, Kyari explained in detail that the assumptions made in the revenue projection were based on the three-year historical dated Brent Oil Price average of $59.07 per barrel.
He also among many other issues, gave explanations on how the equity share in Dangote’s upcoming refinery will be beneficial to the nation at a time many developed nations are finding alternatives to crude oil.
Satisfied with the presentation and explanations, the lawmakers led by the Chairman of the House Committee on Finance, Hon. Abiodun James Faleke expressed satisfaction, noting that the committee has been better informed.
“The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, on Wednesday received accolades from the House of Representatives Committee on Finance for providing detailed explanations on some burning Oil Industry issues at an interactive session on the 2022-2024 Medium Term Expenditure and Revenue Framework (MTERF) and Fiscal Strategy Paper (FSP),” a press release made available to Naija News by the spokesperson of the NNPC, Garba Deen Muhammad reads.
“Chairman of the House Committee on Finance, Hon. Abiodun James Faleke, commended the NNPC GMD for providing an in-depth explanation and insider perspective on some issues surrounding the operations of the NNPC and the Oil Industry stating: “You have made our day. The committee is better informed based on explanations provided by the GMD.”
Mallam Kyari told the lawmakers that 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 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.
The NNPC boss however called on the legislators to help the corporation in its struggle to curb the challenges of petroleum products smuggling.
He noted that the NNPC had also approached some federal agencies like the Customs, the Economic and Financial Crimes Commission (EFCC), the Police, Civil Defence Corps, and others on the matter based on a directive by President Muhammadu Buhari.
Kyari noted further during his presentation that those engaged in the practice of oil smuggling are not interested in selling the products at the approved official price so setting up NNPC Retail stations in neigbouring countries has been discovered to be a wrong solution, hence the plan has been jettisoned.
“People who are smuggling are not looking for officially priced petroleum products. He further noted that going ahead to establish NNPC Retail stations would not yield the desired result since the people who take products across the border are not interested in selling at the official prevailing prices at approved stations but are interested in under-the-counter deals”, he explained.
On the NNPC equity shareholding interest in Dangote Refinery, Kyari explained to the lawmakers that national interest has been factored in and the refinery when it goes operational must buy a specified amount of crude oil from it which guarantees it as a viable investment.
“We will have right to 20 percent 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.