The Federal Government on Monday, denied reintroducing petrol subsidy.
It also said the pockets of queues observed in petrol stations nationwide result from hiccups in distribution from the country’s south to the north, not a lack of supply.
“No subsidy whatsoever. We are recovering our full cost 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,” the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, Mele Kyari, told State House Correspondents after an audience with President Bola Tinubu at the Aso Rock Villa.
Kyari’s assertion comes barely 48 hours after the Petroleum and Natural Gas Senior Staff Association confirmed the return of fuel subsidy.
Speaking on Channels Television’s Politics Today, National President of PENGASSAN, Festus Osifo, said the government still subsidised petrol due to the cost of crude oil in the international market and the exchange rate.
“They [government] are paying subsidies today. In reality, today, there is subsidy because, as of when the earlier price was determined, the price of crude in the international market was around $80 for a barrel.
“But today, it has moved to about $93/94 per barrel for Brent crude. So, because it has moved, the price [of petroleum] also needed to move.
“The only reason the price will not move is when you can manage your exchange rate effectively and you are able to pump in supply and bring down the exchange rate.
“ So, if the exchange rate comes down today, we will not be paying a subsidy. But with the exchange rate value and the price of crude oil in the international market, we have introduced subsidy,” said Osifo.
In his inaugural address after taking the oath of office on Monday, May 29, 2023, President Tinubu announced that the Federal Government is closing the curtains over the subsidy era.
“Subsidy can no longer justify its ever-increasing costs in the wake of drying resources.
“We shall instead re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions.
“Petrol subsidy is gone!” Tinubu said.
The President’s announcement sparked the increase in fuel price from N197 to between N480 and N570; the pump price was subsequently reviewed upward to N620.
Addressing journalists about the gradual return of fuel queues on Monday, the NNPC boss said, “We have seen in very few states pockets of very low queues not unconnected with the road situation.
“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 much longer than they do now.
“They have to reroute the trucks around many locations for them to be able to reach, creating delays and some supply gaps. But that has been filled and we do not see such problems again.”
While arguing that supply remains robust, Kyari explained that the full deregulation of the downstream sector has created market competition.
He said this phenomenon has led to minuscule price variations across gas stations, with consumers naturally patronising marketers with a lesser pump price.
“You must have noticed some fuel stations will reduce prices by two Naira and three Naira, so customers will naturally run to the places where you have that price reduction.
“That creates panic because those who don’t know why they are doing it will think that something wrong is happening.
“Supply is robust. We have over 1.4 billion litres of product, both marine and land. Also, there are no issues around delivering those products onto the land. So, there is no fear, nothing to bother about,” Kyari argued.
The NNPC Chief revealed that the NNPC is liaising with the marketers to address the FOREX challenges.
He clarified, “We’re engaging them to resolve alongside other agencies of government and critical issues around access to foreign exchange.
“Government is doing so much to ensure supply of FX into the market. We know this FX market will stabilize the current I&E window at around 770.
“And we know that those inputs 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.”
As of the time of filing this report, petrol is sold for prices ranging between N615 – N650/litre.
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