Why Fuel Shortage Persists Despite 1.4bn Litres Stock – Kyari

Mele Kyari, the group CEO of the Nigeria National Petroleum Company Limited (NNPCL), has blamed the country’s epileptic fuel supply on poor roads around the country.

Kyari also dismissed speculations of subsidy return, adding that the NNPCL was recovering the full cost from imported products.

Kyari stated this while fielding questions from State House journalists, in Abuja. According to him, some states have witnessed pockets of queues not unconnected with the road situation that has resulted in a number of blockades and preventing easy crossing of products from the southern depots into the northern part of the country.

Kyari noted that it now takes a much longer time than hitherto.

“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 reduced price by two naira and three naira so customers will naturally run to the places where you have that reduction in price.

“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.

Kyari who declared that the company has a stock of 1.4bn litres, added that “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”

On foreign exchange allocation, Kyari said the federal government is doing so much to ensure the supply of FX into the market.

“We know that this FX market will stabilize the current I&E window is around 770.

“We know that those inputs are already happening. The inputs of 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.

“There is no subsidy whatsoever. We are recovering our full cost from the products that we import.”

Kyari’s clarification is coming against the backdrop of speculations of the return of subsidy, amid a shortage of supply and an unstable exchange rate.

The NNPC has remained the sole importer of petroleum products following what is regarded as a huge gap between the landing cost and the current pump price which hovers between 610 and 620 per litre as against the exchange rate of about N970 to the US dollar.

But Kyari said the NNPC “sells to the marketers and we understand why the marketers are unable to import.”