NNPC Gives New Hope to End Petrol Scarcity, Lower Prices

Following the lingering petrol scarcity in Nigeria, the Nigerian National Petroleum Company Limited has given fresh hope for overcoming the challenges and forcing down prices. It assured that it will reopen its purchasing portal once the current backlog of orders for petrol is cleared. This move is to avoid further delay in the distribution of fuel in the country, occasioned by a temporary shutdown of the portal. Oil marketers had warned that shutting the portal encourages product round-tripping, inflates prices, and contributes to scarcity.

NNPC said the huge backlog orders from oil marketers must be attended to. According to the Chief Corporate Communications Officer of NNPC, Olufemi Soneye, there is a need not to detain the money of oil marketers with NNPC for too long while trying to clear the backlogs. This is against the umbrella effort of ensuring the management of the supply chain of the fuel product is efficient, and the financial operations are safe too.

According to Vanguard, Soneye further assured the public that the NNPC would reopen the portal once the backlog of the orders for petrol had been fully resolved. The national oil firm is working hard around the clock to take off the current petrol scarcity in Nigeria, a problem that has caused long queues to be noticed at filling stations across the country. NNPC Vice President in charge of Downstream Operations, Dapo Segun, explained that those were some of the reasons for the scarcity: FX liquidity issues, distribution inefficiencies, imports balancing off against outstanding debts. “It’s quite challenging to sustain supply at this point given the financial and logistics challenges at hand,” Segun said during his address to the nation on Arise Television.

He stated that the company was still finding it hard to source sufficient foreign currency to aid in the importation of fuel. Again, the debts mounting at NNPC have also added to the burden, though Segun assured that the company enjoyed excellent business relationships with their foreign suppliers. In spite of all efforts, however he could not give when exactly fuel shortages would cease,. One of the things NNPC is hoping will finally begin to change the situation is increased collaboration with local refineries.

Reports by ThisDay, an online news publication, say the company has so far supplied 30 million barrels of crude oil to the Dangote Petroleum Refinery. Another 17.6 million barrels are said to be in the pipeline for delivery in the months ahead. It is considered a very vital partnership for the increase in domestic refining capacity to gradually reduce Nigeria’s dependence on imported fuel and allow for stabilization of supply over the long run. Segun further cited Section 205 of the PIA, avowing market-driven pricing in the country’s petroleum industry. The stated legislation squarely intends to ensure the selling and buying in the industry are transparently competitive, adding that eventually, petrol prices should be cheaper for end-users to afford.

Meanwhile, on his other appearance in a television station, Segun said NNPC is just waiting for September 15th, which the Dangote Refinery had promised as the commencement date for the lifting of products. Of course, this would be a landmark event, considering how everybody hopes that the refinery would solve Nigeria’s fuel crisis once it is on stream.

While the NNPC is busy clearing the backlogs of orders and trying to cooperate more with the local refineries, a number of problems such as foreign exchange scarcity and growing debts continue to pose serious obstacles to recovery. However, the reopening of the purchasing portal and the expected contributions from the Dangote Refinery offer hope that fuel scarcity and its resultant price high will soon be mitigated.