Page 13 - DMEA Week 06 2023

DMEA NEWS IN BRIEF DMEA

night, Kyari stated that another contributory
factor to the difference in petrol price between
Nigeria and its neighbours was that those
countries could not afford to import fuel from
Europe the way Nigeria did. He said they
were, therefore, desperate for products from
Nigeria.
Kyari said the pump price of petrol would
be N300, if the government were to remove
subsidy today, stating that the NNPC pays
about N170 per litre on the fuel consumed by
Nigerians.
circulation. Enterprising Nigerians are selling even further,” said Ruth Geku, a 21-year-old Ironically, THISDAY recalls that in the last
cash at premiums of up to 20%. street food seller in Yenagoa city, Rivers state. few weeks many Nigerians have bought the
While Buhari says his government has However, there are few major policy product for as much as N600 per litre, which
been laying the foundations for a stronger differences between Obi and his establishment calls into question the continued subsidy that
economy, many Nigerians complain that rivals - Bola Tinubu of Buhari’s All essentially creates an avenue for marketers to
economic conditions have worsened on his Progressives Congress and Atiku Abubakar profiteer.
watch. of the main opposition People’s Democratic Kyari stated, “I’ve made it very clear that it
The country has weathered two recessions Party. is practically impossible (to stop smuggling)
since 2016, driven by crude oil price slumps, All have promised to reform the economy, in the arbitrage environment, and also in a
hard currency shortages and the COVID-19 including ending the multiple exchange situation where your neighbours are helpless,
pandemic. regime and a fuel subsidy that cost the for you to say that there’ll be no cross-border
Economic fallout from the war in Ukraine government $10 billion last year. movement of petroleum products.
and heavy flooding last year pushed inflation But that has proven difficult in the past. “It is simply impossible to stop this until
to its highest level in 17 years, further Nigerians say cheap fuel - at 184 naira ($0.40) you are able to resolve this arbitrage issue.”
squeezing consumers in a country where 33% a litre - is one of the few benefits they get from He pointed out that Nigeria was dealing
of job seekers are unemployed. their government. with a distribution issue, stressing that NNPC
Oil is the biggest foreign exchange earner, REUTERS has enough stock in-country.
but rampant crude theft in the Niger Delta “So definitely, what you’re dealing with is a
and years of underinvestment have hurt Fuel smuggling won’t stop logistical challenge, rather than anything else,”
output and strained government finances. Kyari said. “Once you are able to put more
For a few months last year, Angola overtook until Nigeria deals with products into the market, deliver more than
Nigeria as Africa’s biggest oil producer and what the country needs, that is essentially
exporter. arbitrage what we have to do so that we can achieve that
Nigeria relies on imports for nearly all optimum level,” he argued.
refined fuels. Its state refineries have produced Group Executive Officer of the Nigerian The NNPC chief executive revealed that
little or no fuel over the past decade due to National Petroleum Company Ltd (NNPC in Abuja, for instance, whereas under normal
poor maintenance, and a refinery being built Ltd, Mallam Mele Kyari, on Tuesday circumstances, the city got around 120 trucks
by Nigerian billionaire Aliko Dangote has maintained that the massive smuggling of of petrol daily, that figure had now climbed to
been beset by delays. petrol outside Nigeria’s shores would not stop 150 trucks in the last one week.
Fortune Alfred, who makes a living driving until the government dealt with the current He added, “So we know that the solution
for the Bolt ride-sharing business, had to park arbitrage situation. is excess supply. Once we are able to do excess
his car at home after spending six hours in a Arbitrage is the practice of taking supply across the country, across locations,
fuel line in Nigeria’s southern oil-producing advantage of a difference in prices in two or you’re going to resolve this issue and that
Rivers state. When he reached the pump, fuel more markets, the profit being the difference is exactly what we are doing now. We are
had run out. between the market prices at which the ramping up evacuation today in many places.”
“The economic situation at the moment product is sold. The NNPC helmsman said the daily
is worse than the early days of Buhari, the Despite Nigeria’s efforts to curb the illegal evacuation was now 70 million litres per
40-year-old said. “The hardships have been trading of its subsidised petrol in some day nationwide. He assured that in the next
created by failure of government.” African countries, the menace has increased one week, the petrol queues would reduce
Amaka Anku, head of the Eurasia Group in recent times, meaning that the country substantially.
consulting firm’s Africa practice, said Nigeria’s basically pays for petrol subsidy for its Kyari stated that the ultimate solution was
economic woes had “created this very high neighbours. to ensure that the pipelines worked. He said it
anti-establishment sentiment” . Although the country has an idea of the was the reason NNPC recently selected some
That is propelling a presidential candidate, volume of fuel evacuated from the depots companies to operate the facilities on a Build,
the Labour Party’s Peter Obi, who is mounting daily, which has been estimated to be about Operate and Transfer (BOT) basis.
a challenge to the two parties that have 64 million litres, it cannot say for sure the He said regarding the long petrol queues, “I
dominated Nigeria since the end of military actual quantity consumed by its citizens since believe very strongly that within the next one
rule in 1999. a substantial amount is taken illegally to week it will clear. I’m not saying that you’re
“Obi will do better, and I hope he is able to locations outside the country. going to have zero queues. We know we can’t
resuscitate this country and not let it drown Speaking on Channels Television last guarantee that because a number of things are

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