An economist, Johnson Chukwu, has said that with the Nigerian National Petroleum Company Limited, NNPCL in debt and unable to pay for Premium Motor Spirit, PMS, Nigerians may not benefit from the Dangote Refinery.
He said while acknowledging that Dangote Refinery will save the country some logistics costs on shipping, insurance, among other expenses, the current indebtedness of the NNPC could prevent the expected benefits from getting to Nigerians.
Speaking on Arise Television on Wednesday, the economist said, “The issue about the NNPC increasing the pump price of fuel on the same day that Dangote Refinery started the production of petrol should not be treated as a separate story. First of all you have to realise that they did mention that the NNPC is owing about $6b.
“How did this debt come about? Because NNPC has been importing fuel and landing at a cost that is lower than the pump price and because it hasn’t been able to recover the cost of importing fuel from the pump price of fuel, it has been accumulating this debt.
“Reports in the media also have it that many oil dealing companies are reluctant to supply NNPC with refined petroleum products because they’ve not been able to pay up the existing debts.
“Now NNPC has entered an agreement to offtake Dangote Refinery products and it also means that NNPC has to pay Dangote Refinery for any offtake of PMS and that payment must come from somewhere.
“So we’re still dealing with a situation where NNPC is not able to generate enough revenue from the sale of the refined products it’s going to buy from Dangote then they’ll start owing Dangote.
“And I don’t think Dangote is in a position to sell on limitless credit to NNPC . That would somehow put Dangote in jeopardy.
“Like I have always said, it is either the federal government from the federation account deductions are made as a topline item to pay for fuel subsidy or somebody has to pay for it.
“It’s either the federal government has to be willing to pay for the subsidy from the federation account receipt or the NNPC won’t be in the position to continue to import fuel or to buy fuel from Dangote Refinery. So…, if NNPC could not pay Dangote for the refined petroleum products, Nigerians will not get the benefits of Dangote Refinery.”
Fuel pump price hike: Nigerians may not benefit from Dangote Refinery – Economist
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