The federal government has debunked rumours making rounds about subsidising fuel imports to keep the price stable despite the fluctuations in forex. The Group Managing Director of the Nigerian National Petroleum Corporation Limited (NNPCL), Mele Kyari made this known.
Kyari, who visited President Bola Tinubu at the Presidential Villa on Monday, said that the price of fuel was determined by the market forces of demand and supply.
He also assured that there was enough fuel supply in the country, with over 1.4 billion litres of products in stock, both on land and at sea.
He attributed the occasional queues at some filling stations to minor price differences among the marketers, as well as poor road infrastructure that hindered the movement of products across the country.
According to him, “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 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.
“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 agencies of government and critical issues around access to foreign exchange”.
Kyari said that getting foreign currency to buy products is difficult, but the government is trying to find ways to make more FX available in the market. He explained that this is important for ensuring that there are enough products for everyone.
He said the FX markets will stabilise, noting that the I&E window is currently around 770.
“We know that those inputs that’s already happening, the inputs of government today will crystallise, 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.”
On speculations about whether subsidy is back, 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 where there is no subsidy.”