Subsidy: Nigeria feeding West Africa with cheap fuel – Winifred Akpani, CEO Northwest Petroleum

Remarks by Winifred Akpani, Managing Director/Chief Executive of Northwest Petroleum & Gas Company Limited at the State House, Aso Rock during the meeting of Independent Marketers with President Bola Tinubu on Wednesday

Excerpts:

Thank you, Your Excellency, government of our beautiful African state. I thank you for your patience this afternoon. He has touched on most of the issues really. But I just want to add that most importantly, this was a courtesy visit.

It was a visit to express our utmost support and solidarity with the government. That is born out of the fact that we have desired, we have prayed for this day to come. And we’re happy that the day is finally here.

We know the difficulties this move has created for the populace. We know what the reactions have been. And one thing we have done is that we’re going to help the government to disseminate the right information on what this is all about. It’s not simply about making transportation more expensive.

It’s not simply about making fuel so expensive, and it’s suddenly out of the reach of the ordinary person so to say. It’s about repositioning this country. I think Nigeria has suffered for too long. It’s about putting your money in the right place. We spent like N4 trillion last year. We have spent N4 trillion this year for the first three, four months already. We’re at about 2.7 trillion in subsidy by the end of this year, would have been at over 6.7 trillion. How much of that really goes to the populace?

We have been feeding the whole West Africa Sub Saharan Africa, with fuel. Since last week Monday and it’s difficult to believe that it’s only 10 days that this happened. If you check all those neighboring countries have all their prices shot up. Probably maybe Niger is the cheapest with about N580 per liter because they were all feeding on Nigeria’s fuel. But that’s not to say that because others are benefiting wrongly, Nigeria cannot be subsidizing the whole of Africa. When we have a lot of our own problems.

So we came today to express our support and to see how we can cooperate with government because ultimately, you can kill the people you’re trying to save. So we’re not going to sit back and say, Hey, yes, you have removed subsidy, so it’s fine. There are a aches, there are pains, what can we all do?

The suggestions we have made today on how we can really move this forward. I wanted I came up with is that over time we have all dependent on PMS because it was cheap. We didn’t develop our gas. There’s electricity. So we’ll have alternate sources of energy. It doesn’t have to be PMS.

Now suddenly, we now realize that we have gas in abundance. There was no fresh investment. Nobody’s going to invest in an economy that is not free. You’re going to have restrictions. since maybe July last year, I don’t think NNPC has paid anything into the Federation accounts.

As a matter of fact, we’re actually going to start billing the Federation because there was spending more a subsidy than they were earning. So these are the problems and that’s why we said it was important for the government to understand that we do support and we are very willing and able to help Nigeria transit this situation.

The President did listen to us very graciously. And it was interesting, because we all suddenly remember that he’s an accountant first and foremost.

He asked and he interjected with very, very intelligent questions, and he understood what we meant by saying we want a complete free market. Free market to want to have one exchange rate so people can stop trading in dollars. When free exchange rate then we can competitive in importation, competitive licensing, and having refineries running.

These are the things we need to pay to write we have gone through so many years of no fresh investments, all you ever see are new depot being built? Why is that because that’s all it takes. If you do that, then you become a marketer and you can begin to sell fuel but no. And we also try to explain that whereas you were buying 10,000 matrix ton petrol for N4 billion, today you have to pay N12 billion. So it’s also important to recognize the fact that the pain is not only for the populace is for the marketers, we’re going to see mergers.

We’re going to see some unfortunately we’ll have to drop off because that’s a lot of money. But that’s also not to say that we’re going to have scarcity No. Finally we’re going to have our real volumes. We have stopped feeding most of Africa already, the volumes have dropped. And it’s not only because you’re saying we can’t afford transportation. It’s only the man who has a Jeep that will spend N70,000 now to fuel his car.

The man who doesn’t have a car doesn’t have to worry about that. All he needs is transportation. And to that extent, we recognize this fact that we have to have an effective mass transit system so that people don’t want to be bothered to drive cars have alternatives, and they’re not going to be stuck at home because they can move.

So most of what we talked about is how do we go from here? How can we actually make it work? How can we go back to almost the points where we are before? It’s possible. And I say that with all sense of responsibility. And one good thing we also have recognize is the fact that a lot of jobs are going to be created, new businesses are going to come up. That’s an adage that says sometimes if you don’t shut a door a window doesn’t open. And you will find out that maybe that window that opens because of the timing, there’s a lot of opportunity that comes through that.

So for us it was a very, very good meeting. And we had an input in we also were able to discuss about helping the economic team, participating in what they’re doing, because they were the people on the field were the ones doing this distribution. What can we do differently?

And one thing that the President also stated clearly is that we must minimize frictions in this system. We must have a free market that works. Whether is licensing if you say you are licensing, how long does it take to license it has to be done promptly.

So in a nutshell, I think that covers essentially what this meeting was all about. We believe by July, which is only a month away, we’re going to begin to really see what is being put in place to help, to assist and to make sure that people can go back to seamless living.

And we all collectively agree that we’re going to work at providing real mass transit buses that work, the ones that run on CNG, which is a compressed natural gas and diesel interchangeably, and hopefully we’re going to start with about 50 to 100. And that is in the very, very short term. And these are locally produced, so you see that we’re also providing jobs, a lot more jobs because we’re using local assembly plants, we are not importing this. That is less pressure on our foreign exchange, and that’s more jobs for Nigerians. And Mr President was very happy with that. And we’re really relieved to thank the President because he has a perfect understanding of a lot of the issues. I guess we’re not surprised but we were almost amazed to use that word. He asked all the right questions and he pointed to who could solve this problem and that problem. So like I said, we’re really, really grateful that we’ve had this interaction, and we’ll take it from there. And hopefully, everybody here and Nigerians at large will begin to see that even if this sounded very difficult, it’s a very, very good move, and very courageous. We’ve been trying to do this for so many years. No president has had the courage to do this. But now we’ll have to face it and like we said, support is what is required now to sit this through.