Fakoyejo OlalekanThe Group Chief Executive Officer of Nigerian National Petroleum Company (NNPC) Limited, Mele Kyari, said the reason Nigerians are experiencing fuel scarcity is that the product is in the wrong locations.
Kyari said the 2022 flood in the country disrupted the supply chain which in turn prevented stakeholders to transport the fuel to certain locations in the country. He disclosed this in an interview with Channels TV.
He said the inability to transport the goods resulted in redundancy, and with arbitrage creeping up across the country due to the fuel scarcity, oil marketers are taking advantage by pushing the products to areas where the price is higher after the flood subsided.
“There is fuel in the country but it is just in the wrong location. When there is arbitrage, oil market traders will naturally look for where the prices are higher and they will move those products to those locations which can be filling stations, or trucks, waiting to be sold off to people who can buy at N350 per litre.”
Meanwhile, he said Nigeria’s struggle to make fuel available has worsened due to the cost of transferring vessels, which Kyari said has risen to $80 per day from $21.
“The cost of hiring transfer vessels shifts from $21 in early January 2022 to close to $80 per day in some locations today.
“Our compensation template under the price regime we are running today did not see that coming. So, somebody has to pay for this and that adjustment must take place,” Kyari stated.
The NNPC boss further opined that forex scarcity is also a contributing factor to the fuel crisis, considering equipment for depots and trucks’ management are purchased outside the country.
“There is also the issue of managing the depots and the trucks, for instance, every depot buys equipment and facilities and materials they have to buy from overseas and they need FX to buy them.
“Prices move without any reference to our local situation. Costs rise when we are not able to adjust the pricing template where cost recoveries can be made,” Kyari explained.
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