Nigeria National Petroleum Corporation NNPC yesterday said that it is no longer feasible to continue to sell fuel at N145 per liter at the current exchange rate.
The Group General Manager, Crude Oil Marketing, NNPC, Mr. Mele Kyari stated this at this year’s Oil Trading and Logistics Expo, OTL, holding in Lagos.
He said “We have a very difficult business environment. It is impossible today to import products at the current market price, at the existing fixed foreign exchange, FOREX rate. There is no way today you take products to retail and sell at N145. It is not possible today. If that is true and I believe that it is true because we all go to the market, why can’t we sell above N145.
“That is where legislation should come in,” he said. Kyari, who explained that the current price is not realistic, however said that any official increase by the government will not go down well with the citizenry as it will be resisted.” He further said, “I also know today that it is impossible for this government to announce tomorrow that petrol is about N150. This government cannot sustain it. That is the truth. The people will not take that number. That is why suppliers are not importing.
“It is not foreign exchange. We have created a niche market for the foreign exchange. I am part of the committee allocating foreign exchange. We give foreign exchange. It is rejected. The reason being given is that foreign exchange is not enough to import. The truth is that that is not the truth.
“The truth is that marketers go back to the market and land the product here, that you are required to sell it at N145 maximum. I am sure they won’t make it. That is the main reason why people are not importing today. It is not foreign exchange shortage.”
Kyari further explained that Nigeria is still in a subsidy regime, as the NNPC takes the bulk of importation to ensure that petrol is sold at the official rate of N145 per litre. “Today, we are in subsidy regime, absolutely. There is no way you bring product today and take it and sell at N145 and get back your money, and make profit. That is not possible. You can see some marketers saying that fuel is N138. It is because they did not import. Somebody has taken the heat of the price. Because we (NNPC) have taken the heat, and you buy from us you can afford to go to the market and then put a ridiculous price. It is not possible, because they did not import it. It is not FX,” he said.
Debunking the notion that marketers are constrained by the unavailability of FX, he accused them of being reluctant to go for it. “As I speak to you there is stranded FX that nobody is ready to pick. We have close the chapter on FX,” he added.
