Kyari also said queues coming up in parts of the country may be due to little price differentials among marketers
By Kehinde Okeowo
Mele Kyari, the Group Managing Director of the Nigerian National Petroleum Corporation Limited (NNPCL), has refuted claims that the President Bola Tinubu-led administration is paying subsidy on fuel imported into the country in a bid to stabilise the commodity’s price amidst forex fluctuations
TheNiche had earlier reported that the Petroleum & Natural Gas Senior Staff Association of Nigeria (PENGASSAN) confirmed the return of fuel subsidy after the president announced its removal during his May Day speech.
Speaking on Channels Television’s Politics on Monday, the National President of PENGASSAN, Festus Osifo said due to the cost of crude oil in the international market and the exchange rate, the government still pays subsidies on petrol
“They (government) are paying subsidy today. In reality today, there is subsidy because as of when the earlier price was determined, the price of crude in the international market was somewhere around $80 for a barrel. But today, it has moved to about $93/94 per barrel for Brent crude. So, because it has moved, then the price of petroleum also needed to move,” he said.
Reacting to the speculations, Kyari, who met with President Bola Tinubu on Monday, at the Presidential Villa, claimed that the market forces of demand and supply are still at play in the country
He also disclosed that over 1.4 billion litres of fuel products are currently in stock, both marine and land.
The NNPC GMD reasoned that the semblance of queues coming up in parts of the country may be due to little price differentials among the marketers, including poor road networks hampering the transportation of products across the country.
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His words, “They have to reroute the trucks around many, many locations for them to be able to reach and that created delays and some supply gaps. But that has been filled and we do not see any of such problems again. And secondly, because of the full deregulation that we have in this sector, marketers are now competing amongst themselves.
“So you must have noticed some fuel stations will reduce prices by two and three naira, so customers will naturally run to those places where you have that reduction in prices. And that creates panic, because for those who don’t know why they are doing it, they will think that there’s something wrong happening, or there’s an ominous sign of scarcity, or people will start queuing up in the fuel stations.
“Otherwise, there is no challenge. Supply is robust. We have over 1.4 billion litres of product in our hands, both marine and land. Also, there are no issues with the delivery of those products onto the land. So there is no fear—nothing to bother about. But we are also happy that the market forces are now playing out and marketers are competing and of course, there are a few issues we’re engaging them to resolve alongside other agencies of government and critical issues around access to foreign exchange”.
Commenting on the challenges associated with accessing forex to facilitate product availability, Kyari said the government is working on modalities to ensure the supply of FX into the market.
He said the FX markets will stabilise, noting that the I&E window is currently around 770.
“We know that those inputs that’s already happening, the inputs of government today will crystallise, and they will also come to an equilibrium position in the FX market, and this is a dream of this country.
“So they will have a stable FX market and a stable product market where the prices of products will also speak to the prices of other commodities. And this is already manifesting, and we think this is the economic revolution that this country needs.”
On speculations about whether subsidy is back, he said, “No subsidy whatsoever. We are recovering our full costs from the products that we import. We sell to the market, and we understand why the marketers are unable to import.
“We hope that they do it very quickly, and these are some of the interventions the government is doing where there is no subsidy.”