Key stakeholders in the fuel supply and distribution value chain have agreed to collaborate to ensure a smooth transition into the Post-fuel subsidy regime in the petroleum sector.
Some of the stakeholders include the Nigerian National Petroleum Company Limited (NNPCL), which is the sole importer of petroleum products and the supplier of last resort in the country; the Major Oil Marketers Association of Nigeria (MOMAN) and the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN).
In separate reactions to last Monday’s pronouncement by the newly sworn in President, Bola Tinubu, that the era of subsidy payment on fuel was gone, the groups welcomed the development and resolved to work together to avoid a disruption in the supply and distribution of petroleum products in the country.
The Group Chief Executive of the NNPCL, Mele Kyari, told journalists in Abuja that the Company welcomed the decision by Tinubu to announce that the era of payment of subsidy on PMS was over in the country.
The GCEO said subsidy payment has been a major challenge to NNPCL operations for a long time, as the company had been shouldering the burden of funding fuel subsidy payment singlehandedly from its lean cash flow, since the government was unable to defray the cost of subsidy due to it.
He said the NNPC believes the decision by the Tinubu administration to remove fuel subsidy would finally free available resources for the NNPC to continue its work for the country and the oil and gas industry.
“Removal of fuel subsidy would allow the NNPC to continue to function as a commercially viable entity,” Kyari said.
With the return of fuel queues at filling stations across the country following the announcement, Kyari said the NNPC would like to assure Nigerians of sufficient stock of petroleum products to maintain supply for a reasonable time, particularly premium motor spirit (PMS), popularly called petrol.
There is no reason to panic, although he Acknowledging the possibility of people scrambling for fuel in the aftermath of the pronouncement by Tinubu, Kyari urged consumers not to be scared about potential changes in the retail price of the commodity in the foreseeable future.
He said the possibility of an adjustment in the fuel price was not enough reason for people to rush to filling stations to buy more quantities of petrol than they need.
The NNPC, the GCEO, assured was monitoring all fuel distribution networks and support facility, saying he was confident normalcy would be restored very soon.
In their reaction, MOMAN and DAPPMAN in a joint statement applauded the pronouncement of fuel subsidy removal, saying they fully endorsed the move to phase out the policy in the country.
The two groups said the clarification provided by the government 24 hours after the initial pronouncement by Tinubu, that the policy would not take off immediately, signals a courageous and pragmatic shift in the country’s economic trajectory.
In the joint statement, the groups expressed satisfaction in the light of the assurances by the NNPC and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) of their readiness to work with the relevant stakeholders in the fuel supply value chain to ensure a smooth implementation of the policy.
They reiterated the assurance that there was no cause for alarm, while urging consumers to eschew panic buying to stockpile petrol, to avoid creating artificial scarcity and endangering themselves.
“With NNPC assurance of adequate supply of fuel and the NMDPRA resolve to work with other stakeholders to ensure a smooth transition, we have instructed our members to open all fuel distribution channels to ensure that fuel was readily available at all filling stations across the country.
“The decision to phase the fuel subsidy regime is not only a fiscal reform, but also a significant stride towards social justice.
“We are heartened that the administration plans to redirect the substantial funds towards the provision of essential publish goods such as infrastructure, education and healthcare. These investments represent our shared future, promising long-term benefits for all Nigerians,” they said.
Acknowledging the concern of Nigerians for a potential upward price adjustment, the two groups said the marketers of petroleum products would maintain reasonable pricing regime, as the NNPC currently remains the sole supplier of the products as the supplier of last resort.
The groups said they anticipate a minimal adjustment to the distribution costs, considering that the cost of product constitute about 80 percent of the pump price.
They pledged to collaborate with the National Association of Road Transport Owners (NARTO) and other stakeholders to diligently manage the distribution costs to minimise their impact on the overall retail pump price.
In view of the clarification by the NNPC and NMDPRA, MOMAN and DAPPMAN said they have already directed their members to continue distributing fuel to all legitimate marketers and ensure that all filling stations remain open for business, while avoiding hoarding of products to cause artificial scarcity.
They expressed eagerness to see the commencement of operations of the Dangote Refinery in July as scheduled anlong with other licensed importers of petroleum products, to join the NNPC in a bid to diversify the source of supply of petroleum products and enhance market competition.
MOMAN and DAPPMAN said they would continue to dialogue with the government to advocate for stability in the oil sector during the transition period, saying they were prepared to support any measures by the government to help cushion the impact of the policy on the populace.
