Why oil marketers withdrew from importing petrol — Kyari

Mele Kyari, the group CEO of the Nigerian National Petroleum Company Limited (NNPCL), says oil marketers withdrew from importation of Premium Motor Spirit (PMS) also known as petrol because they could not manage the challenges of price fluctuations in the downstream sector.

This is why the NNPCL has remained the sole importer of petrol. He said this during a session with the Senate Committee on Finance, Kyari said on Wednesday.

Petroleum marketers, including the Independent Petroleum Marketers Association of Nigeria and the Depot and Petroleum Marketers Association of Nigeria, opted out of importation, citing volatility in the foreign exchange market, which they deemed detrimental to their profitability and survival.

Kyari maintained that the distortion in the foreign exchange market is nothing to worry about, but assured lawmakers that despite the corporation’s monopoly on importation, the downstream sector was functioning well.

“The oil companies withdrew because they can’t manage the oscillation and responsibility that the Petroleum Industry Act imposed on us. We have the market and I can assure you that we are managing this. Some marketers buy from us and sell. But there is an element that we can’t control. For instance, truck owners can adjust their prices, we have no control over that”, he said.

Read also: NNPC needs to be transparent about profit, revenue – World Bank

Addressing the foreign exchange market challenges, Kyari mentioned, “There is always a parallel market in every country,” and expressed confidence that the margins between the official and parallel markets would narrow by the end of the first quarter of the next year, encouraging more players to enter the importation market.

Kyari argued against reports of NNPC’s unimpressive profits, stating, “I’m glad to inform you that as of October, we were able to deliver N4.5 trillion into the federation account.”

He emphasized NNPCL’s adherence to transparency, profitability, and value creation for shareholders, highlighting the positive impact of the Petroleum Industry Act reforms on the company’s performance.