The Nigeria National Petroleum Company Limited, and the Nigeria MidStream and Downstream Petroleum Regulatory Authority, have explained that the nation is facing a petroleum crisis because of distribution challenges faced by the marketers.
The bodies also explained that the hike in the price of PMS was following the current exchange of N452 to a dollar, adding that the landing price of the product was at N350 per litre.
The Group Managing Director of NNPCL, Mele Kyari, and the Chief Executive, Nigeria MidStream and Downstream Petroleum Regulatory Authority, Farouk Ahmed, spoke in Port Harcourt yesterday when the Minister of Petroleum, State, Hon Timipre Sylva, visited the Armed Forces formations in the state on the ongoing fight against oil theft.
Speaking, Kyari stated that the sector is not having supply problems but rather a distribution challenge, adding that there was enough production in the country.
He said the distribution is a result of prices difference, stressing that marketers divert products to areas where prices are high.
Kyari said: “I don’t think that your data is correct that it is only one depot that is selling in Rivers State. We do not have a supply problem, we have a distribution challenge.
“Distribution challenge that is coming as a result of price differentials. People take products from areas where prices are low to where prices are high and you see that spike in areas where prices are low.
“We are containing it. We know that there are logistics problems. We are aware that pricing today is a very serious challenge we working with the partners and marketing companies and that balancing can come so that normalcy will come.
“The downstream has shut down seven depots, this is to bring control to depot price to normalize the price across the country.”
Similarly, the Chief Executive NMDPRA, Farouk Ahmed, also distribution is the cause of the scarcity, adding that the dollar exchange rate is another reason for the Petro crisis.
He said: “Supply is not the problem, what we have a problem with is distribution. Even though it concerns the marine movement, where the marketers are moved to chatter vessels to move products from offshore level.
“Secondly is the issue of Nigeria’s depreciation, when we see improvement in the revenue generation maybe that will help the naira to stabilize. It is all intertwined.
“The landing cost of PMS in Nigeria is around N352 per litre, without the subsidy. Like it is on the Pump price and that pump price is on the basis of the official exchange rate of N450 per dollar.
“If you do not have it, for example, NNPC uses that as part of their benchmark and that is why they sell at about N352 per litre. Once it is don’t get at the secondary market the price will be what is it today.
