No End to Fuel Importation – NNPC

The Nigerian National Petroleum Company Limited (NNPC) has clarified that it has not halted the importation of petroleum products into the country. This statement was made by NNPC’s spokesperson, Olufemi Soneye, in response to recent reports.

Soneye emphasized that while the company prioritizes sourcing from domestic refineries, it will continue to import petroleum products when necessary. He noted that the Group Chief Executive Officer (GCEO) of NNPC, Mele Kyari, was accurately quoted at the Nigerian Association of Petroleum Explorationists conference as saying the company now sources products from local refineries. However, this was misinterpreted in some quarters to mean an end to fuel importation.

“The GCEO’s statement, ‘Today, NNPC does not import any product; we are only taking from domestic refineries,’ should not be misconstrued as a declaration that NNPC will no longer import fuel,” Soneye clarified. He added that NNPC’s decisions on sourcing refined products are guided by economic viability.

Soneye further explained that while local supply is prioritized if cost-effective, other marketers in the deregulated sector also evaluate costs before deciding whether to source locally or import. He highlighted that the authority to grant import licenses resides with the Nigerian Midstream and Downstream Petroleum Regulatory Authority, as stipulated by the Petroleum Industry Act (PIA). The PIA ensures a competitive market by capping NNPC’s market share at 30% to prevent monopolies.

Kyari, during the conference, also commended the government’s support for domestic refining and outlined the benefits of reducing fuel importation. He noted that minimizing petroleum product imports could significantly alleviate foreign exchange pressures and stabilize inflation.

The NNPC spokesperson also lauded the accurate reporting of NNPC’s investments in Compressed Natural Gas (CNG) infrastructure, describing it as a critical step in enhancing energy security and affordability.

Kyari concluded by emphasizing the economic logic behind selling crude to domestic refineries in naira, stating it leads to a “net-zero gain” while easing FX demands and supporting the naira’s stability. He commended President Bola Tinubu for initiatives aimed at addressing the economic challenges tied to petroleum product imports.