Nigerian Government Confirms No Subsidies , Emphasises Cost Recovery On Imports

The Nigerian government has clarified that it does not provide any subsidies for Petroleum Motor Spirit otherwise known as petrol, rather the government is recovering its full cost from the products it imports.

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The Group Managing Director of the Nigerian National Petroleum Corporation, NNPL, Mele Kyari, made the clarification on Monday while briefing State House Correspondents on the current state of subsidy removal on and other developments in the sector.

Kyari affirmed that there is no challenge in the supply of PMS to Nigerians as he confirmed that currently, the nation has 1.4 billion litres of the product both in marine and on land facilities.

Speaking on appearing queues across filling stations, the GMD NNPL said that present market forces have become determinants of petrol prices thereby inducing competition among the petrol fuel marketers.

Mr Kyari stressed that the long queues across the filling stations are not unconnected to the road situation such as blockades on major roads where crossing of products from southern depots into the northern part of 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 the marketers are unable to import. We hope that they do it very quickly and this are some of the interventions the government is doing there is no subsidy.

The GMD NNPCL stressed that the delay caused by the blockades further causes supply gap and as well causes trucks carrying PMS longer time to deliver the products across the nation.

“So you must have noticed some fuel stations will reduced price by two Naira and three Naira so customers will naturally run to the places where you have that reduction in prices.

“But 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. And as you all know, government is doing so much to ensure supply of FX into the market.

“And 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 or people start queuing up in the fuel stations.

“They have to reroute the trucks around many, many locations for them mom to be able to reach and that created delays and some supply gaps. But that has been filled and we do not see any of such problems again. And secondly, because of the full deregulation that we have in this sector, marketers are now competing amongst themselves”.

Mr Kyari emphasized that the government is also engaging the marketers on critical issues of reconciling the FX and availability of forex thereby ensuring supply of FX into the market.

He assured that with the intervention of the federal government, the FX market will stabilise, Kyari disclosed that the current FX is around 770 hence achieving an equilibrium position in the FX market.

“We know that this FX market will stabilize the current I&E window is around 770. 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 the 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.”

“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. But 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. And as you all know, the government is doing so much to ensure the supply of FX into the market” the GMD NNPL added.