Nigeria’s Federal Government on Monday debunked reports that it has backed down in its complete removal of petrol subsidy saying fuel subsidy has gone for good.
There had been recent media reports that government has been paying subsidies on petrol so as to keep the pump price from skyrocketing beyond the current average of N619 per litre.
Responding to the issue while answering reporters’ questions after a closed-door meeting with President Bola Tinubu at the State House, Abuja, the Group Chief Executive Officer of Nigeria National Petroleum Company Limited, Mele Kyari, said there is no subsidy whatsoever as NNPC is recovering full cost of petroleum products being imported.
He explained that fuel prices in Nigeria are determined by market forces and global oil prices, and there is no financial burden placed on the government or taxpayers due to subsidies.
His words: “No subsidy whatsoever. We are recovering our full cost from the products that we import. We sell to the market we understand why the marketers are unable to import. We hope that they do it very quick and this are some of the interventions government is doing, there is no subsidy.”
On the fuel scarcity that has been noticed in some States and Abuja at the weekend, the NNPC boss blamed the development on a mixture of bad roads, competition among marketers and foreign exchange challenges.
According to him: “We have seen in very few States pockets of very low queues. This is not unconnected with the road situation as we’re seeing the number of blockades on our roads crossing products from the southern depots into the northern part of the country, and it takes them a much longer time now.
“They have to reroute their trucks around many, many locations for them to be able to reach 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. So, you must have noticed some fuel stations will reduce price by two Naira and three Naira so customers will naturally run to the places where you have that reduction in prices.
“That creates panic, because for those who don’t know why they are doing it, they will think that there’s something wrong happening, or there’s an ominous sign of scarcity and people start queuing up in the fuel stations.
“Otherwise, there is no challenge. Supply is robust. We have over 1.4 billion litres of product in our hands, both marine and land. Also there are no issues around delivery of those products into the land. So there is no fear, nothing to bother about.
“We are also happy that the market forces are now playing out and marketers are competing and of course there are a few issues we’re engaging them to resolve alongside other agencies of government and critical issues around access to foreign exchange.
“As you all know, government is doing so much to ensure supply of FX (foreign exchange) into the market.
We know that this FX market will stabilize. Current I&E window is around N770.
“And we know that those inputs that are already happening, the inputs of government today will crystallize and also they will come to an equilibrium position in the FX market and this is a dream of this country.
“So, they will have a stable FX market, stable product market where the prices of product will also speak to prices of other commodities. And this is already manifesting and we think this is the economic revolution that this country needs.”
Deji Elumoye in Abuja
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