The Nigerian National Petroleum Company Limited (NNPCL) GCEO, Mele Kyari, has emphatically stated that there is no more subsidy on fuel in Nigeria.
Kyari disclosed this to State House correspondents on Monday after a meeting with President Bola Tinubu at the Presidential Villa in Abuja.
Recall that the National President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Festus Osifo, had on Friday claimed that the government had restored subsidy on fuel, despite the official government policy of ending the subsidy regime since May.
However, Kyari explained that the occasional queues and lower fuel prices observed in some states were not indicative of a return to the fuel subsidy regime.
He said the government was recovering its full costs from the imported products.
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; there is no subsidy.”
Roadblocks on the routes connecting southern depots to the country’s northern regions are to blame for some of the country’s fuel queues, which result in delayed deliveries and brief supply shortages, Kyari said.
He highlighted that full deregulation of the sector had led to healthy competition among marketers, resulting in reduced fuel prices at some stations.
He said this price competition had led to some customers flocking to stations with lower prices, potentially causing panic among those unaware of the market dynamics.
Kyari reassured the public that there was an ample supply of fuel, with over 1.4 billion litres of products available, both on land and in marine storage.
He also emphasized that there were no issues with the delivery of products.
Regarding foreign exchange issues, Kyari mentioned that the government was actively working to ensure a stable foreign exchange market.
He acknowledged that the current exchange rate of around N770 to the US Dollar was part of the transition towards a more stable market, aligning the prices of petroleum products with other commodities.
He said, “We have seen in very few states pockets of very low queues. Unconnected with the road situation, 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 than they do now.
“They have to reroute the trucks around many, many locations for them to be able to reach their destinations, 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 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 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 government agencies and critical issues around access to foreign exchange.
“And as you all know, the government is doing so much to ensure the supply of forex into the market.
“We know that this FX market will stabilize. The current I&E window is around N770. And we know that those inputs that’s already happening, the inputs of government today, will crystallize, 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,” Kyari stated.
