NNPC: Fuel Scarcity Not Deliberate Attempt to Influence, Scuttle Elections
The Nigerian National Petroleum Company Limited (NNPC) yesterday claimed it stands to gain nothing by attempting to create artificial gasoline scarcity in order to sway the upcoming general election, in a covert reaction to Bola Tinubu, the All Progressives Congress (APC) candidate for president.
However, the Major Oil Marketers Association of Nigeria (MOMAN) has claimed that NNPC lacks the capacity to supply and distribute the volume of petrol that would serve all Nigerians, despite the fact that the country’s citizens continue to complain about the lingering petrol shortage and long lines at gas stations.
In an outburst on the campaign trail, Tinubu claimed that the nation’s present issues, such as the lack of gasoline and the devaluation of the naira, were caused to harm his prospects of winning the presidential election.
However, the Group Executive Officer of the NNPC maintained that the statewide petrol shortage was not new and wasn’t directed at anyone while speaking on the publicly owned Nigerian Television Authority (NTA).
He claimed that despite efforts to stop it, there had been an intermittent shortage of the product since 2022.
He emphasized that there was no supply issue in the system, but said that prices had been impacted by new market dynamics related to logistics and handling costs.
He said that in order to provide Nigeria’s daily consumption of 60 million liters, at least 1,800 tankers must be on the road each day, and it may take them up to seven days to reach their destinations. Kyari stated that there’s no scarcity of fuel, stressing that the situation has been further compounded by consumer behaviour and panic buying.
He emphasized the efforts being made to shorten the fuel lines and emphasized that prices would soon drop at the depots to restore normalcy.
He asserts that Nigeria currently consumes almost 70% of the fuel used in the entire West African subregion.
The GCEO claimed that although the West African region would have been a sizable market, the business was having trouble because of the arbitrage produced by price discrepancies.
He said, “There’s greed up and down the value chain.”
According to Kyari, the original plan for the gasoline pipelines called for no truck to go more than 400 kilometers, but the Jesse fire in Delta made it impossible to pump gasoline from Warri to Benin and then Ore.
Regarding Atlas Cove, he said that before it was shut down, Port Harcourt to Aba was also losing a lot of money and that the NNPC was losing 24% of its products as a result of vandalism.
He continued by saying that it was crucial to reconstruct the facilities using the Build, Operate and Transfer technique because to the age of the pipeline and their shallowness.
“I do not think anybody sits down to orchestrate that there should be scarcity so that it will impact elections and so on. I don’t think it happens that way if it is so. But it is not true because the reality is that these glitches actually started early in 2022.
“It has nothing to do with this election period. Once you have a challenge of this nature, it is a cyclical thing. Once you have this challenge, they continue to come up, and then once you have arbitrage issues, you have this glitch.
“Today, our redundancy in terms of petroleum products supply is just three days in this country. Once you have a glitch that extends longer than three days, you need another three weeks to stabilise it. So irrespective of who does what, whatever causes the three-day glitch, it is a nightmare waiting to happen.
“Once we see this glitch, that is why we do everything possible to avoid the glitches from happening. I do not think anyone will sit down and say let us create this so that there will be an impact on the elections and so on.
“There is no benefit in it. No one would do this and I can tell you this very clearly that there is no one issue that bothers the president like this. There is no briefing that I do to the president that he does not mention this,” Kyari stated.
He said it was impossible to link petrol shortage to the elections, noting that NNPC was doing everything in its power to control the situation.
“Yes, there are a lot of glitches. There are a lot of logistics and nightmares. Greed has come into play. There are cross-border issues that we have to deal with. There are international market situations that you have to deal with,” he said.
Kyari maintained that Nigeria has enough stock in-country, but added that distribution was a major challenge.
“We do not have a supply problem because as we speak now, we have over 28 days of supply even if we evacuate up to 60 million litres of PMS every day. We have a distribution problem that comes up as a result of the shift in the cost of logistics in our business taking fuel from the mother vessels to the terminals into trucks to the fuel stations.
“Several things have changed and we do not have an automatic adjustment system that will resolve this as a result of the fuel subsidy regime we are currently operating in the country. However, fuel subsidy payments are understandable to protect consumers from the vagaries of market forces,” he noted.
In his remarks, the Chief Executive of the Nigerian Midstream and Downstream Regulatory Authority (NMDPRA), Farouk Ahmed, stated that there’s about 28 days offshore capacity while there’s 12 days onshore, stressing that there has been an increase in charges to move vessels from offshore to onshore from about $19,000 to $60,000 per day in some locations.
He said that there had been roadside issues, including accidents that led to significant gaps and, thus, arbitrage. He mentioned that hundreds of gas stations that broke the rules had been closed.