Nigeria’s oil industry will join the big league in December when it becomes a net exporter of refined petroleum products.
Nigerian National Petroleum Company Limited (NNPCL) Group Chief Executive Officer (GCEO), Mele Kyari, said yesterday that ahead of this, the Port Harcourt Refinery will go into full operation and petrol supply from next month.
According to him, the Warri and Kaduna refineries will follow suit by December.
On Sunday, Alhaji Aliko Dangote said the Dangote Refinery will pump petrol in commercial quantity also from next month.
These are expected to bring relief to Nigerians.
Kyari spoke when he appeared before the National Assembly Joint Committee on Finance.
He was part of the Federal Government’s finance team that shared ideas with the lawmakers on how the Executive is tackling the myriad of economic challenges.
Yesterday, the National Bureau of Statistics (NBS) put the June headline inflation rate at 34.19 per cent, pushed up by the 40.87 per cent food inflation.
Other members of the economic team at the parley led by the Coordinating Minister of the Economy Mr. Wale Edun were: Budget/National Planning Minister, Senator Atiku Bagudu; Minister of State for Petroleum Resources, Senator Heineken Lokpobiri; Central Bank of Nigeria (CBN) Governor, Dr Yemi Cardoso, represented by Deputy Governor (Economic Policy) Muhammad Abdullahi and Federal Inland Revenue Service (FIRS) Chairman, Mr. Zacch Adedeji.
Edun and Abdullahi joined the meeting during the closed-door session.
Relying on emerging indicators in the energy and gas sector, the NNPCL boss told the committee that Nigeria will become a net exporter of refined petroleum products by December.
Kyari told the committee that the Port Harcourt Refinery will start production early next month, adding that this will be followed by the one in Warri and Kaduna Refinery latest by December.
He added that in a few months, the daily crude oil production will hit two million barrels with the logistics so far put in place.
Kyari said: “NNPCL and the oil and gas industry are very critical in bringing a turnaround in our current economic situation, and we understand the importance of this. We are taking every step that is practical for us to achieve this.
“We have already seen growth in our oil and gas production because of certain actions that Mr. President personally took, and also the very mere truth that we have also declared a war on production activities and this is yielding the required results.
“The combination of these two has now seen us restoring production in our country, and we believe that, as the minister has said, we will soon hit the target of two million barrels of oil production per day.
“I’m aware that there are several comments in the public space around refining business and domestic production, including production that will come from the commissioned Dangote refinery.
“This country will be a net exporter of petroleum products by the end of this year. We’re very optimistic that by December, this country will be a net exporter.
“That means a combination of production coming from us, and also from Dangote refinery and other smaller producing companies are in line to do this.
“So, I can confirm to you, Mr. Chairman, that by the end of the year, this country will be a net exporter of petroleum products.
“We have spoken to a number of your committees that it is impossible to have the Kaduna refinery come into operation before December, it will get to December. Both Warri and Kaduna but that of Port Harcourt, will commence production early August this year.”
The CBN Deputy Governor said the triple challenge of rising inflation, foreign exchange rate fluctuations and food inflation would soon be on the reverse trend as indicators to that effect are already emerging.
Bagudu said the 2024 Budget is already being implemented and that there is ongoing negotiation with Labour leaders on the new minimum wage.
Chairman of the joint Committee, Senator Sani Musa, appealed to Nigerians to persevere “as the government is working around the clock to stabilise the economy”.
He added: “Our critical interactive session with you as managers of the economy is about economic growth. It’s about how we can get our policies to work. How we will support Nigerians.
“The National Assembly is very concerned because we are the representatives of the people. And we are obliged to ask what is happening and this is the reason for this meeting.
“We have heard from you, at least you have given us preambles of the activities going on, on how our economy can get back on track.
“You are all aware of the obstructions our economy has had in the previous years and it is not going to be easy that overnight, in 365 days or in one year of the coming administration, things will change. It will be gradual.
“I believe that Nigerians will persevere. This is the only time we can all come together as Nigerians to give His Excellency the President, all the needed support to get us out of all the trouble we have been.
“The indicators are showing that the economy is doing well. Things are a bit difficult because it is not easy for inflation that has gone up to go down like that. It takes time.”
Inflation rises to 34.19 per cent
Nigeria’s headline inflation rate rose marginally by 0.24 percentage points to 34.19 per cent last month from 33.95 per cent in May.
Food inflation also increased to 40.87 per cent last month against 40.66 per cent the previous month.
The National Bureau of Statistics (NBS), in its latest report, said: “In June 2024, the headline inflation rate increased to 34.19 per cent relative to the May 2024 headline inflation rate which was 33.95 per cent.
‘’Looking at the movement, the June 2024 headline inflation rate showed an increase of 0.24 per cent points when compared to the May 2024 headline inflation rate.”
The NBS stated this in its Consumer Price Index (CPI) released yesterday.
The CPI measures the average change over time in the prices of goods and services consumed by people daily.
“On a year-on-year basis, the headline inflation rate was 11.40 per cent points higher compared to the rate recorded in June 2023, which was 22.79 per cent,’’ the report added.
However, the rate of increase (0.24 percentage points) is lower than that of May and other months.
“On a month-on-month basis, the food inflation rate in June 2024 was 2.55 per cent, which shows a 0.26 per cent increase compared to the rate recorded in May 2024 (2.28 per cent),” it said.
The NBS attributed the development to a rise in the average prices of food items.
CPI had risen from 33.20 per cent in March to 33.69 per cent in April.
Nigeria has seen 19 months of consecutive inflationary pressure, pushing the inflation rate to a 28-year high.
Many experts at Cordros Capital Group, and CardinalStone Group, had expected a gradual and sustained decline in inflation in the months ahead, with some highlighting possible disinflation from July 2024.
Financial Derivatives Company (FDC) predicted that average prices would rise further this month. It cited renewed inflationary pressure.
FDC particularly noted that imminent wage increases could trigger cost-push inflation.
President of the Association of Capital Market Academics in Nigeria, Prof. Uche Uwaleke, said recent fiscal measures by the Federal Government designed to address food shortages would manifest in a slowdown of costs.