The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has held a meeting with oil marketers to resolve the challenges faced with importation and distribution of petroleum products in the country just as NNPC Group Managing Director has said that the Federal Government is no longer paying subsidy on petrol. Malam Mele Kyari, said this to State House Correspondents in Abuja. He said that contrary to insinuations on social media, the federal government was no longer paying subsidy to any person or group for bringing petroleum products into the country. “No subsidy whatsoever. We are recovering our full cost from the products that we import. We sell to the market. We understand why marketers are unable to import. We hope that they begin to do so very quickly and these are some of the interventions government is making. There is no subsidy,’’ he said.
The meeting was hosted by NMDPRA’s Chief Executive, Mr Farouk Ahmed, on Monday in Abuja. It featured representatives of the Major Oil Marketers Association of Nigeria (MOMAN), the Nigerian National Petroleum Company (NNPC) Ltd. and Independent Petroleum Marketers Association of Nigeria (IPMAN). The Depot and Petroleum Marketers Association of Nigeria (DAPPMAN) and the Nigerian Association of Road Transport Owners, among other stakeholders were also represented at the meeting. The meeting was necessitated by challenges faced by oil marketers, ranging from foreign exchange scarcity for importation of petroleum products, deplorable roads nationwide, non-functional refineries and refusal of banks to provide loans. Ahmed, while speaking to the newsmen shortly after the meeting, said the meeting tackled issues surrounding the seamless distribution of petroleum products and the way forward. He said based on the discussion, the oil marketers solicited the authority’s support to ensure the federal government guarantees availability of petroleum products at affordable prices.
“We had very robust discussions and the oil marketers expressed their concerns and also areas where we can support both the marketers and transporters to ensure that there is flow of petrol products across the country. NNPC Limited has assured of supply and also the marketers have expressed their concerns about the availability of foreign exchange in order to also import and sell. As regulators, we can continue to say the market is open for everybody and all those who have applied for license, over 90 marketing companies have gotten. We have given them access to all the required support that they needed in order to ensure there is a constant supply of products in the country,” he said. On the foreign exchange challenges faced by marketers, Ahmed explained that engagement had been ongoing with the Central Bank of Nigeria (CBN) in that direction to make the dollar available. We are all working towards stabilising of the naira,” he said. Mr Dapo Segun, Executive Vice President, Upstream, NNPC Ltd., assured of the commitment of the national oil company to make petroleum products available to Nigerians.
Segun said the company would continue to shop for supply. “We are looking at ways to resolve these issues. We at NNPC will continue to make sure that supply is there and we will also support the industry.” The Chairman of DAPPMAN, Mrs Winifred Akpani, also assured of adequate supply of the products and said Nigerians should not panic. The government has promised to resolve some of the issues for us, bearing in mind that we just transited from regulated market to deregulated market. We expect some of these issues to come but the most important thing is the willingness of all of us as stakeholders to resolve the problem,” she said.
Also Kyari said that the pockets of low queues witnessed across some states recently were due to bad roads that had made transporters to divert the product to other routes. “We have seen in very few states pockets of very low queues. This is not unconnected with the road situation and that’s why we’re seeing some blockades on our roads. Moving the products from the southern depots into the northern part of the country takes them much longer time now than it used to be. They have to re-route their trucks around many locations for them to be able to reach their destinations and that created delays and some supply gaps. But, that has been filled and we do not see any of such problems again. Secondly, because of the full deregulation that we have in this sector, marketers are now competing amongst themselves,” he said. The NNPCL group managing director also said that some of the queues were caused by the preference of customers to patronise filling stations that offered low prices.
“You must have noticed that some fuel stations will reduce their prices by N2 or N3. So customers will naturally run to the places where you have that reduction in prices and probably create panic. This is because those who don’t know why they are doing it will think that there’s something happening or that there’s an ominous sign of scarcity,’’ he said. According to him, there are over 1.4 billion litres of petrol available for local consumption, both on the seas and on land, adding that there is no cause for alarm. Kyari said that market forces were now playing out and that marketers were competing for the product and how to satisfy their customers as well. “There are few issues we’re engaging them to resolve, alongside other agencies of government, particularly critical issues around access to foreign exchange. And as you all know, government is doing so much to ensure supply of forex into the market. We know that this FX markets will stabilise the current I&E window is around 770. And we know that those inputs from government will crystalise and they will come to an equilibrium position in the FX market and this is the dream of this country,’’ he said. Kyari assured marketers of a stable forex and a situation where the prices of the product would align with the prices of other
