The Group Managing Director of Nigerian National Petroleum Company Limited, Mele Kyari has denied insinuations that the Federal Government had begun to pay subsidy on petrol again.
The NNPC GMD made the denial on Monday while speaking with news men at the Aso Rock Presidential Villa, Abuja.
Asked whether fuel subsidy which was removed in May had come back, Kyari responded:
“No subsidy whatsoever. We are recovering our full cost from the products that we import. We sell to the market we understand why the marketers are unable to import. We hope that they do is very quick and this are some of the interventions government is doing there is no subsidy.”
He attributed the current queues at filling stations in parts of the country to what he called the poor state of the roads nationwide which has increase travel time for tankers carrying petrol from one part to the other.
He also attributed the fuel queues to market forces which had forced some of the oil marketers to reduce the price of their product by some fraction, saying that such reduction would necessarily attributed buyers thereby causing queues at the affected filling stations.
Kyari allayed the fears of buyers, stating that over 1,4 billion litres of the product are available in the country.
He said: “We have seen in very few states pockets of very low queues. Not unconnected with the road situation that we’re seeing the number of blockades on our road crossing products from the southern depots into the northern part of the country and it takes them a much longer time than they do now. 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 reduced price by two Naira and three Naira so customers will naturally run to the 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 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. 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. And as you all know, government is doing so much to ensure supply of FX into the market.
We know that this FX markets will stabilize current I&E window is around 770.
“And we know that those inputs that’s already happening, the inputs of government today will crystallize and also they will 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, stable product market where the prices of product will also speak to prices of other commodities. And this is already manifesting and we think this is the economic revolution that this country needs.
