Government Has Ended Subsidy On Petroleum Products, Says Kyari

By Uche Mbah
The Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Mele Kyari, has announced the end of the subsidy regime that has bedeviled the nation for decades, declaring it effectively dead.
Kyari, in his official Twitter handle of the NNPC, announced that under-recovery of petroleum products is no longer possible. He later substantiated this in a Television interview.
“As of today, subsidy/under-recovery is zero. Going forward, there’ll be no resort to either subsidy or under-recovery of any nature. NNPC will just be another player in the market space. But we’ll be there for the country to sustain the security of supply, at the cost of the market”, he twitted.
Controversy has trailed the subsidy regime even during the six-year period under former President Goodluck Jonathan. The then Finance Minister, Ngozi Okonjo-Iweala, had a running battle with marketers, over it, which involved several periods of fuel scarcities. President Buhari, during his campaign, said he will not pay anything on subsidy, but his government has paid far more in subsidy than any previous government.
“Today, we have a very robust product supply and distribution mechanism; from the loading, depots up to fuel stations nationwide.
“We also have a very good understanding with our strategic partners: the governors, marketers, depot owners, PTD, among others. There are no issues whatsoever.”
The international oil prices had slumped due to Russian beef with the OPEC Gulf members, and this was made worse by the global impact of Coronavirus on the international market. Recently, sweet Brent slipped marginally below $20 per barrel, and FG came under pressure to reduce pump price, and they responded with an initial N145/litre to N125/litre, followed by a further reduction to N123.50. Many fuel stations are yet to comply.
“The key issue in the crude oil business is market fundamentals of demand/supply. I believe COVID-19 will subside and countries will come back to life. I don’t see the oil price going below the $20 we saw last week. I’m certain, all things being equal, the oil price will bounce back.
“As of yesterday, our production has, for the first time in many years, rising to 2.3 mbpd. We believe this will grow and the contribution of local companies in this regard will be meaningful”, he said.