The announcement that the Bola Tinubu administration would not continue the fuel subsidy regime triggered off fuel queues in Lagos and Abuja, but NNPC Limited assured late yesterday that there is sufficient supply of Petroleum Motor Spirit (PMS).
But there are reports that some stations are already selling fuel for between N350 and N800 per litre as against the official rate of N185/litre, while NNPC Limited cautioned against panic buying.
In a video release, NNPC’s Group Managing Director, Malam Mele Kyari said there is enough supply of the products and that panic buying is unnecessary.
He said: “We welcome the decision of Mr. President to announce that subsidy on (Petroleum Motor Spirit) PMS is over. It has been a major challenge for NNPC continued operation. We have been funding subsidy from the cashflow of the NNPC since government is unable to defray the cost of subsidy that is due to the corporation. We believe that this will free resources for NNPC to continue to do the great work that it will do for our country, and allows us to continue to function as a commercial entity. We welcome this development.
“Secondly, we like to assure Nigerians that we have sufficient supply of petroleum products, particular PMS in our country, and there is no reason to panic. We understand people will be scared of potential changes to the price of petrol. But that is not enough for people to rush to fuel station to buy more than what they need. We also assure that we are watching all the distribution channels and support facilities, and we believe that normalise will be restored soon”.
NNPC Limited welcomes the decision by the Federal Government to remove subsidies on PMS.
Addressing the press, the GCEO of NNPC Limited, @MKKyari noted that the removal of the subsidy, which has been a burden on NNPC Limited's cash flow, will free up funds to enable optimal… pic.twitter.com/a6VsPlzNIS
— NNPC Limited (@nnpclimited) May 30, 2023
In January, the Federal Government announced that it would stop the payment of fuel subsidy by the end of June.
The then Minister of Finance, Budget and National Planning, Dr. Zainab Ahmed disclosed that in the 2023 fiscal period, the government had made provisions of N3.36 trillion for fuel subsidy payment to cover the first six months of this year.
The disparity in the pump price of PMS is however widening further widen. This is blamed on incomplete delivery of products to many filling stations, oil marketers said.
Dealers under the aegis of the Independent Petroleum Marketers Association of Nigeria (IPMAN) said there had been a lopsided pattern in the distribution of PMS lately, stressing that this would cause scarcity and worsen the price disparity in retail outlets.
They said that NNPC Limited, through its NNPC Retail subsidiary, had not been delivering the exact number of trucks of fuel that were meant for independent marketers.
“Here in Port Harcourt, for instance, we have Oando and NNPC Retail, and they have products in some private depots. Master Energy and Liquid Bulk also have products, but there is no volume for independent marketers”, IPMAN National Public Relations Officer, Chief Ukadike Chinedu told The Guardian.
He added: “Independent marketers have no volume in all these depots and we have over 3,400 tickets lying and waiting at the NNPC Retail account. This new system is now making independent marketers beg for petroleum products from NNPC Retail.
“It is until NNPC Retail has finished loading products to its own outlets before it would now attend to independent marketers. It has made the independent marketers the third tier in terms of the bulk distribution of petroleum products, which is very incorrect”.
Independent marketers operate about 80 per cent of filling stations nationwide, both in villages and other remote areas, making them the largest downstream distributors of petrol.
Ukadike explained that the recent lopsidedness in products distribution by NNPC Retail “is the problem that leads to price disparity. We are now forced to go and buy products from retail outlets and some of these tank farm owners at a very exorbitant price”.
IPMAN National President, Mr. Debo Ahmed said the situation at private depots (coastal depots) was quite worrisome.
He said that downstream oil sector operators “must do something now to restore the depleted faith of independent marketers, especially at the Port Harcourt coastal depots”.
He further said: “In the second week of February this year, a vessel discharged about 28 million litres (622 trucks) of PMS in TSL depot (Oando).
“A 162-trucks programme was released for IPMAN, which was about 7.3 million litres. Out of the 162-trucks programme given to us, we struggled to load less than 100 trucks. About 62 tickets are still there waiting for the next vessel.
“In the last week of February, another vessel discharged 13 million litres (288 trucks) of PMS at Liquid Bulk. Only a 56-trucks programme was released for IPMAN. We were all expecting the next programme, just to hear that the product finished last week”.
