The Group Chief Executive Officer of the Nigerian National Petroleum Corporation Limited (NNPCL), Mele Kyari, recently emphasized that the NNPC operates using the official foreign exchange rate, just like all other Nigerians.
During an interview with ARISE NEWS on Thursday, Kyari addressed the issue of the removed fuel subsidy, stating that fluctuations in the foreign exchange rate would not impact fuel prices in the country, as the NNPC has consistently adhered to the official FX rate.
Kyari explained, “I’m sure you must have heard what Mr. President said about exchange rate normalization, and that will simply mean a single exchange rate market for everyone. As of today, NNPC uses the official exchange rate, which will now be subject to the stabilization measures announced by Mr. President. We anticipate this happening very soon.”
He further elaborated on the transition process, stating, “Once that occurs, everybody, including the NNPC, will access foreign exchange at the same rate. However, such changes usually involve a transitional period. You will witness a gradual shift away from the NNPC’s reliance on the official exchange rate, leading to a single market rate that the NNPC itself will also adhere to.”
Kyari clarified that this adjustment would not result in an increase in fuel prices alongside other petroleum players in the market who may not utilize the official exchange rate. He explained, “This situation will regulate consumption. Higher commodity prices typically lead to decreased consumption, naturally reducing the volume of the product required. My estimate is that consumption will decrease by approximately 30%.”
While acknowledging the absence of verifiable data on the current consumption level in the country, Kyari noted that depot evacuations provide a basis for estimation. He projected a 30% decrease in evacuations, which would subsequently decrease the demand for foreign exchange. This, in turn, would ensure that all market participants, including the NNPC, have access to the same FX window.
Kyari concluded, “Ongoing engagements are taking place to ensure that everyone has access to this single window market for foreign exchange. When that happens, there will be no significant spiral or noticeable change.”
In summary, the NNPC’s CEO affirmed that the NNPC operates under the official exchange rate, and any upcoming changes in the exchange rate will not result in a significant impact on fuel prices. The transition to a single market rate will regulate consumption while ensuring equitable access to foreign exchange for all market participants.
