Nigeria has Enough Fuel, Greed is the Problem – NNPC Chief, Kyari
Mele Kyari, The Group Chief Executive Officer of Nigerian National Petroleum Company (NNPC) Limited, says Nigeria has enough fuel supply. He also added that the fuel can be found in the wrong locations.
Kyari made this statement when he appeared on Channels TV for an exclusive interview. Addressing the fuel scarcity in the nation, the NNPC Chief said, “there is fuel in the country but it is just in the wrong location.” He explained that the 2022 floods generated road failures which made it difficult for stakeholders to transport products from one location to another.
Also, Mele stressed that the inability of stakeholders to effectively distribute fuel from one location to another led to redundancy in distribution. Kyari further hinted that the redundancy birthed arbitrages that led to nationwide greed across the value chain.
NNPC Chief lists reasons for fuel scarcity
Speaking during the interview, Kyari revealed that when there is arbitrage, traders in the oil market look out for places, where “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.” He noted that it is the arbitrage environment that gives birth to the fuel scarcity Nigerians are experiencing in different parts of the country.
The NNPC Chief also explained that the rising costs of hiring transfer vessels contributed to the challenge. He revealed that the cost of hiring a vessel rose from $21 in January 2022 to $80 per day in some locations today. Kyari said since “our compensation template under the price regime we are running today did not see that coming, somebody has to pay for this and that adjustment must take place.”
Furthermore, Kyari threw his weight behind the management of depots and trucks. He stated that every depot purchase equipment, facilities and materials from overseas with FX. He also noted that the prices in the exchange market fluctuate without any reference to what happens in Nigeria. Kyari said failure to adjust the pricing templates for cost recoveries led to increase in the cost of fuel.
Kyari apologises to Nigerians
The NNPC Chief apologised to Nigerians for the inconvenience and hardship fuel scarcity has brought upon them. He took responsibility for the glitch and promised to resolve it. He said, “We know that the solution is excess supply. Once we are able to do excess supply across the country, across locations, we are going to resolve this issue, which is exactly what we’re doing now.”
Noting that the stakeholders of NNPC derive no benefit from the fuel scarcity, Kyari said, “We are ramping up evacuation today. On a daily basis, we are doing more than 70 million litres into the market against the regular evacuation of up to 63-64 million litres” He further expressed the belief that with the ongoing work, several locations will begin to experience ease.
Lending a voice to the reason for long fuel queues, The GCEO said panic buying by Nigerians will make them spend more time in the station, which will eventually generate long queues. Kyari also noted that online payment issues coupled with the scarcity of the new naira note also contribute to fuel queues.
Recall that Mele Kyari had earlier stated that the fuel crisis in the country is not caused by supply, but by distribution challenges.
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