State run oil company, the Nigerian National Petroleum Corporation (NNPC) has opted for a fresh initiative aimed at resolving the pig-headed petrol shortage across the country.
The new strategy according the Group Managing Director (GMD) of the NNPC Ibe Kachikwu is the rehabilitation of the Brownfield refineries using a new business model.
The GMD who spoke at the one day conference of the National Association of Energy Correspondents ( NAEC) which held in Lagos, said currently all refineries have been re-streamed but yet to attain optimal capacity.
Kachikwu who was represented by Bola Ashafa, MD NETCO said this has become vital following low level output from the four local refineries.
He regretted that Nigeria is synonymous to the highest importer of premium motor spirit (PMS) also called petrol inspite of her huge resources.
He however noted that the agency is strategically going to ensure this is no longer the case in the next few years.
“The NNPC has resolved to implement a new strategy to transform the Nigerian Midstream oil sector into a transparent, efficient and fair market by ensuring the rehabilitation of the Brownfield Refineries using a New Business Model”.
On fuel subsidy, the GMD said the initiative is not sustainable as over N5 trillion was expended between 2006 and 2012.
According to him, Subsidy creates distortions in government revenue distribution as a result of round tripping and unnecessary carryover of expenditures every year in a way that is difficult for government to control or sustain.
Subsidy he said accounted for 20 percent of government budget in 2013 and also government is not in control of the factors that influence retail fuel price, particularly the fluctuations of crude oil price at international market.