Fuels Scarcity: We’re Having Distribution Challenge – NNPCL GMD

Group Managing director, Nigeria National Petroleum Company Limited, Mele Kyari has said the challenges of distribution faced by marketers was responsible for the lingering fuel scarcity in the country.

Kyari spoke on Thursday in Port Harcourt when the Minister of State, Petroleum, Hon. Timipri Sylva, visited the Armed Forces formations in the State on the ongoing fight against oil theft.

The NNPC GMD said there was enough oil production in the country, insisting that the sector is not having supply problems but rather a distribution challenge.

He noted that there are logistics problems, causing price differentials across the country.

“We do not have a supply problem, we have a distribution challenge.

“Distribution challenge that is coming as a result of price differentials. People take products from areas where prices are low to where prices are high and you see that spike in areas where prices are low.

“We are containing it. We know that there are logistics problems. We are aware that pricing today is a very serious challenge we are working with the partners and marketing companies and that balancing can come so that normalcy will come.

“The downstream has shut down seven depots, this is to bring control to depot price to normalize the price across the country.”

Also speaking on the matter, Chief Executive Officer, Nigeria MidStream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, said that apart from the challenges of distribution, another reason for the fuel crisis is dollar exchange rate.

He said: “Supply is not the problem. Where we have a problem is with is the distribution. Even though it concerns the  marine movement, where the marketers are moved to chatter vessels to move products from offshore level.

“Secondly is the issue of Nigeria’s depreciation, when we see improvement in the revenue generation maybe that will help the naira to stabilize. It is all intertwined.

“The landing cost of PMS in Nigeria is around N352 per litre, without the subsidy. Like it is on the Pump price and that pump price is on the basis of the official exchange rate of N450 per dollar.

“If you do not have it, for example, NNPC uses that as part of their benchmark and that is why they sell at about N352 per litre.”