October 10, (THEWILL) – The Nigerian National Petroleum Company Limited (NNPCL), has debunked claims that the Federal Government has reintroduced payment of subsidy on Premium Motor Spirit (PMS), commonly known as petrol.
President Bola Tinubu had on May 29, during his inauguration as President, at Eagle Square, Abuja, announced the effective end of the subsidy regime.
Amid an increase in the price of crude in the International market, petroleum marketers in Nigeria in their threat to further increase the pump price of petrol even as the marketers confirmed that the landing cost of the product has increased at the depot, had backdown on their action.
While THEWILL had earlier reported the reintroduction and indeed secret payment of subsidy on PMS, National President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Festus Osifo, on Friday, also claimed that the government had restored subsidy on petrol, despite the official government policy of ending the subsidy regime since May.
Speaking on Monday, to State House correspondents after a meeting with President Bola Tinubu, Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, said there is no fuel subsidy at all.
Kyari explained that the 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.
“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 this very quickly and these are some of the interventions the government is doing. There is no subsidy”, said Kyari.
On fuel queues in some parts of the country, Kyari said the challenges were caused by blockades on roads connecting southern depots to the northern regions of the country, leading to delayed deliveries and temporary supply gaps. that full deregulation of the sector had led to healthy competition among marketers, resulting in reduced fuel prices at some stations.
He said the 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 emphasised that there were no issues with the delivery of products.
Regarding foreign exchange issues, Kyari disclosed that the government was actively working to ensure a stable foreign exchange market; adding that the current exchange rate of around N770 to the US Dollar was part of the transition towards a more stable market, aligning prices of petroleum products with other commodities.
“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 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 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 the 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, the government is doing so much to ensure the supply of forex into the market.
“We know that this FX market will stabilise. The current I&E window is around N770. And we know that those inputs that are already happening, the inputs of the government today will crystallise 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, a stable product market where the prices of the 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”, he added.
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