The Group Chief Executive Officer of Nigerian National Petroleum Company Limited (NNPCL), Mr. Mele Kyari, on Thursday said that the lingering nationwide fuel scarcity was not connected to unavailability of product but to the challenges in the oil industry’s downstream subsector.
Kyari, who made this remark during an interview on the Good Morning Nigeria Programme of the NTA News Network, pointed out that disruptions of supply were usually due to road accidents and other glitches in the course of fuel distribution nationwide
He described Nigeria as a very big country with high fuel consumption demand with about 1,700 fuel trucks required to deliver products daily to marketing outlets nationwide.
He pointed out that once accidents and other road travel glitches occurred, product distribution to fuel stations across the country would become extremely difficult.
In addition, the industry top player also attributed panic buying by consumers to the lingering fuel crisis and maintained that there was no scarcity of fuel but consumers were merely responding to the realities in the country.
Kyari cited the situation in which queues were more noticeable in filling stations that sell at regulated pump price of N180/litre than in those selling at arbitrary prices of up to N350-N500/litre to justify his position on the fuel scarcity saga.
Kyari expatiated: “We do not have a supply problem because as we speak now, we have over 28 days of supply even if we evacuate up to 60 million litres of PMS every day. We have a distribution problem that comes up as a result of the shift in the cost of logistics in our business taking fuel from the mother vessels to the terminals into trucks to the fuel stations.
“Several things have changed and we do not have an automatic adjustment system that will resolve this as a result of the fuel subsidy regime we are currently operating in the country. However, fuel subsidy payments are understandable to protect consumers from the vagaries of market forces”, he added.
Kyari further disclosed that the recent meeting held by the NNPCL with stakeholders in the downstream sub-sector’s value chain was yielding desired results as all of them are now collaborating to ensure that normalcy is restored to the downstream market.
According to him, one of the findings at the meeting is that some depots are facing some logistics challenges and that once these are tackled and logistics costs are handled effectively there will be improved fuel distribution nationwide.
He said: “Once you crash the prices at the depot, the prices at filling stations will crash and that arbitrage will go. Then people will see that the prices across the stations, whether they are owned by NNPC or independent marketers, will have some normalcy, and fuel queues will vanish.”
