Nigerian National Petroleum Corporation, NNPC has stated that it is saving over N100 billion monthly for the nation through price modulation introduced by the present administration as a panacea to the problem of subsidy debt from the past administration.
A statement made available yesterday explained that the current administration is addressing inherited huge catalogue of issues and problems in the downstream sector that made efforts to end fuel scarcity difficult.
According to NNPC, “The unpaid arrears arising from the subsidy regime had necessitated most oil marketers to stop all forms of involvement in petroleum products imports.
“With the firm support of Mr. President and the National Assembly, we greatly reduced this debt burden and since January 1st, 2016 we have been able to eliminate subsidy payments by managing prices at current levels through price modulation.”
Some of the issues include arrears of subsidy payments to Oil Marketers, corruption and inefficiencies in the supply and distribution chain, incessant vandalism of pipelines, refineries’ poor performance, among others.
The Corporation said that combination of these issues resulted in most oil majors completely pulling out from the importation business and NNPC assuming a near 100 percent importation obligation without the necessary logistics put in place.
NNPC also explained that it is committed to petroleum products supply and will eliminate the endemic scarcity within the next few days.
“Nationwide petroleum supply and distribution have been ramped up to all states to ensure product availability in the country. The current supply to states is in excess of the normal consumption, especially in the five major consuming cities.
“As partners in progress, we encourage the general public to report product hoarders and saboteurs of this administration’s change efforts as they are wittingly fighting every bold change effort currently being put in place. We encourage everyone to shun panic buying and undue return trips as this attitude emboldens marketers to hoard products.”
NNPC also said that supply constraints due to foreign exchange challenges are being resolved through collaboration with the Central Bank of Nigeria, CBN on innovative ways of closing the gaps in accessing foreign exchange.
“We are vigorously pursuing an improved model for ‘crude oil for refined product’ exchange (the Direct Sale – Direct Purchase arrangement) which eliminates inefficiencies with an attendant cost saving for the nation of about $1 billion. This will guarantee sustainable product supply to the nation,” it added.