Victor EzejaThe Group Managing Director of the Nigeria National Petroleum Company Limited (NNPCL), Mele Kyari, has insisted that the downstream petroleum sector of Nigeria’s economy is fully deregulated, pointing out that this explains why oil marketers now compete among themselves to the extent of selling a litre of premium motor spirit (PMS) otherwise known as petrol N3 cheaper.
READ ALSO: NNPCL Denies ‘Northern Oil Cabal’ Claims, Affirms Transparency In Pipeline Contracts
He stated that, “because of the full deregulation that we have in this sector, marketers are now competing among themselves. So, you must have noticed some fuel stations will reduce prices by two or three Naira so customers will naturally run to the places where you have that reduction in prices.”
The pump price of PMS has not changed since July despite a more than 30 per cent rise in global crude oil prices. Oil prices rose by about four per cent yesterday to about $88 per barrel on the backdrop of the Israeli and Palestinian war. Chevron, operator of the Tamar gas field offshore in southern Israel has shut down production at the field following instructions from the Israeli energy ministry.
Within the last two weeks, there has been speculations in the media that the federal government has been paying subsidy on petrol to keep the pump price from skyrocketing beyond the current average of N620 per litre. Oil marketers has now come out to state that the current pump price of petrol does not reflect market realities.
At a meeting with the Nigerian Midstream and Downstream Regulatory Authority (NMDPRA) in Abuja yesterday, the marketers pointed out that NNPCL maintained a dominant role due to unavailability of forex, which marketers are unable to access at the I & E window. As things stand, NNPCL is now the sole importer of petrol because private firms are unable to obtain forex, four months after imports were opened up to private players.
But rising from a meeting with President Bola Tinubu at the Presidential Villa in Abuja yesterday, Kyari insisted that oil marketers are keying in to deregulation and are competing amongst themselves. He then insisted that there is no subsidy whatsoever because the oil company is fully recovering its costs of supplying the product.
According to him, “No subsidy whatsoever. We are recovering our full cost from the products that we import and sell to the market. We understand why the marketers are unable to import. We hope that they do so very quickly and these are some of the interventions the government is doing. But there is no subsidy.”
On the resurfacing of fuel queues some states and Abuja over the weekend, Kyari blamed the development on a mixture of bad roads, competition among marketers and forex challenges.
According to him: “We have seen in very few states pockets of very low queues. This is not unconnected with the road situation as we’re seeing the number of blockades on our roads crossing products from the southern depots into the northern part of the country, and it takes them a much longer time now.
“They have to reroute their trucks around many locations for them to be able to reach destinations and that created delays and some supply gaps. But that has been filled and we do not see any of such problems again.”
“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 and people 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 around delivery of those products into the land. So, there is no fear, nothing to bother about.
“As you all know, the government is doing so much to ensure supply of FX into the market. We know this FX market will stabilise. Current I&E window is around N770,” Kyari said.
Follow Us