The Group Managing Director (GMD) of the Nigerian National Petroleum Company Limited (NNPCL), Mr. Mele Kyari, has disclosed that fuel consumption has declined by 30 percent following the removal of petrol subsidy by President Bola Tinubu, while the nation’s oil production soars to 1.67 million barrels per day.
He stated this at the media briefing by the Minister of Finance and Co-ordinating Minister of the Economy, Mr. Wale Edun, in Abuja.
According to Kyari, the reduction in fuel demand from about 66.7 million litres daily before the removal of subsidy to about 46 million currently also meant a 30 percent reduction in NNPCL’s demand for foreign exchange to import fuel.
The NNPCL GMD also explained that the $3 billion deal with the African Export-Import Bank (AFREXIM) was not a loan but a forward sale arrangement and has not collapsed.
“I was checking the data for Wednesday for crude oil and condensate production is at 1.67 million barrels. This is substantial if you look at the situation where we are almost going below a million barrel about a year and some months ago,” he said.
Similarly, the Minister of Finance noted that Nigerians had huge funds in domiciliary accounts that could be deployed to rejuvenate the economy, so the Federal Government is aiming to attract such funds in the fresh move to take the economy to a position of high growth, through productivity and efficient management of resources.
The administration of President Bola Tinubu is looking to attract funds held in domiciliary accounts and funds held by Nigerians abroad into massive investments in various sectors of the economy.
He said, “What we can see is that really, there are quite substantial sources of foreign exchange in Nigeria. There is a lot of cash outside the system, which if brought into the system, increases the money supply of dollars, increases in reserves, and so forth.
“There are funds in domiciliary accounts, which if you give people the incentives they will utilize those for investment in Nigeria. Nigerians in Nigeria have huge holdings of foreign currency in banks abroad in financial institutions abroad.
“We need to provide the environment that brings those funds home to choose to invest in Nigerian economy rather than foreign economies, which is what they are doing right now.
“If you place money in a bank abroad, you’re investing in a foreign economy. Finally, we also have huge source of funds from the diaspora.
“Nigerians living and working abroad, who of course, have their families here and who are interested in keeping a presence here; we have to encourage them to be willing to save in Nigeria, perhaps by improving payment mechanisms and so on and so forth; so we have done a lot to aim at them.
“There is plenty of hope and it is our determination to put in place the kind of structures and incentive framework that brings Nigeria money abroad and even Nigeria money outside the system into the financial and economic system to work, to create jobs for Nigerians. Mr. President believes in fiscal federalism.”
The Minister also noted that N2 billion has been released out of the N5 billion palliative package for each state of the federation, including the federal capital territory (FCT), to cushion the impact of the removal of the petrol subsidy.
Mr. Edun admitted that Nigerians were passing through challenges due to the fiscal reforms embarked upon by the present administration but insisted that it would be temporary and necessary steps were being taken by the government to ease the pains of the people.
“Until benefits of removal of subsidy feeds through, and until the NNPCL’s revenue from oil production going up feeds through, there is a challenge to balance the books, particularly in terms of foreign exchange,” he said.