Petrol price hike caused by distribution, not supply problems – Kyari

Port Harcourt — The Nigerian National Petroleum Company Limited, NNPCL, says the current nationwide fuel scarcity and hike in the price of the premium motor spirit, PMS, commonly known as petrol, is due to distribution challenges and not from supply of the product.

The Group Chief Executive Officer of NNPCL, Mele Kyari, who 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 from places where the 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 depots to bring about sanity in the system, in order to normalise ex the 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 currently at N352 per litre. Ahmed blamed the situation geopolitical crises as well as on foreign exchange rate and the depreciation of the Naira.