The Nigerian National Petroleum Corporation Limited says the ongoing nationwide scarcity and price hike of premium motor spirit, commonly known as petrol, was due to distribution challenges and not from supply of the product.
The Group Chief Executive Officer of NNPCL, Mele Kyari, disclosed this while fielding questions from newsmen in Port Harcourt, said marketers and middlemen were taking products from areas with low price to areas with high prices thereby creating price differentials.
Kyari also denied the claims that only one out of 17 depot was operational in Port Harcourt, and one out of 45 depots was operational in Lagos; assuring that plans were underway two contained the fuel scarcity menace in the country.
“It is not true that only one depot is functional in Port Harcourt. We do not have supply problem but distribution challenge that is coming as a result of price differentials.
“People take products at places where price is low, to areas where price is high which causes price hike at areas where price is low.
“We are containing it; we know that there are logistics issues, but we know that price differentials are a very difficult situation, and we are working with the partners and marketing company so that balancing can come.
“I can assure that the fuel queues are not caused by supply problems but distribution challenges. As you are aware the Authority has shut down over seven despots to bring about sanity in the system, in order to normalize ex depot price.”
Also speaking, the Chief Executive Officer of Nigerian Midstream and Downstream Petroleum Authority, Mr. Farouk Ahmed, said the landing cost of PMS was a currently at N352 per litre.
Ahmed blamed the situation geopolitical crises as well as on foreign exchange rate and the depreciation of the Naira.
“The problem is note supply but what we have is distribution challenges especially marine movement where the marketers are paying more to chatter marine vessels to move products from offshore Lagos to Port Harcourt, Calabar, and other places, etc.
“And this is caused by the international geopolitical crises that resulted in shortage of products, particularly AGO.
“Secondly is the issue of Naira depreciation, once we see improvement in oil production that will translate to improvement in revenue generation for the federation which invariably will help the Naira to stabilized, so it’s all intertwined.”
