The Group Managing Director of the Nigerian National Petroleum Corporation Limited (NNPCL), Mele Kyari, has refuted the circulating allegations suggesting that the federal government might be subsidizing fuel imports to stabilize prices amidst fluctuations in foreign exchange rates.
During his meeting with President Bola Tinubu at the Presidential Villa, Kyari maintained that market dynamics, driven by the interplay of supply and demand, were the primary factors at play.
He also disclosed that there are currently over 1.4 billion liters of fuel products in stock, including marine and land reserves.
Kyari explained that the appearance of queues in some parts of the country might be attributed to slight price variations among different marketers and logistical challenges, such as poor road networks hindering the transportation of products across the nation.
He stated, “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. Secondly, because of the full deregulation that we have in this sector, marketers are now competing amongst themselves.”
He further clarified, “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.”
Regarding the challenges associated with accessing foreign exchange to facilitate product availability, Kyari mentioned that the government is actively working on methods to ensure the supply of foreign exchange into the market. He expressed confidence that the foreign exchange markets would stabilize, with the I&E window currently around 770.
He concluded by addressing speculation about the return of fuel subsidies, stating emphatically, “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.”
