▪︎As petrol may sell at N234 per litre
Group Managing Director of the Nigerian National Petroleum Corporation, Mele Kyari, on Thursday, raised the alarm that the corporation pays between N100billion and N120billion every month as subsidy on petrol.
Kyari made this disclosure while answering questions from State House correspondents at the fifth edition of the Special Ministerial briefings coordinated by the Presidential Communication Team.
He stated that the corporation could no longer bear the hravy burden of the product currently being sold at N162 per litre.
Kyari spoke after the Minister of State for Petroleum Resources, Timipre Sylva, had spoken on the effort to ensure the passage of the Petroleum Industry Bill.
The NNPC boss, who said thr corporation absorbed the cost differential which was recorded in its financial books, disclosed that while the actual cost of importation and handling charges amounted to N234 per liter, the government is selling at N162 per litre.
He said market forces must be allowed to determine the pump price of petrol in the country.
Kyari, however, added that government was being considerate of actual impact of the price increase on Nigerians.
Read him: “Today, NNPC is the sole importer of PMS, we are importing at market price and we are selling at N162 per litre today.
“Looking at the current market situation today, the actual price could have been anywhere between 211 to around 234 naira to the litre.
“The meaning of this is that consumers are not paying for the full value of the PMS that we are consuming and therefore, someone is bearing that cost.
“As we speak today, the difference is being carried on the books of the NNPC and I can confirm to you that the NNPC may no longer be in the position to carry that burden and because we can longer afford to carry it on our books.
“As we speak today, I will not say we are in subsidy regime but we are in a situation where we are trying to exit this underprice sale of PMS until we come in terms of the full value of the product in the market.
“PMS sells across our borders anywhere around N300 to the litre and in some places up to 500 to N550 to the litre.
“Our current consumption is evacuation from the depots about 60 million litres per day, we are selling at N162 to the litre, and the current market price is around N234, the actual market price today.
“So, the difference between the two, multiplied by 60 million x 30 will give you per month. I don’t have the numbers now, this is simple arithmetic that we can do but if you want exact figures from our books, I do not have it at this moment but it’s anywhere between a hundred billion and up to 120 billion naira per month. I don’t have the exact number.”
He said that with full deregulation, oil marketers would begin to import PMS, thereby taking the burden off NNPC and bringing the Direct Sale-Direct Purchase (DSDP) Programme to an end.
“Upon the full implementation of the deregulation, we expect that all oil marketing companies to commence import even now so that that burden of import will be taken away from the NNPC or even the supply for when the local refinery is made available so that NNPC will not be the sole supplier of PMS into this market.
“So, once this situation arises, you are sure that the DSDP programme will automatically vanish because you will have no further need for it because market forces will now determine the import and export.
“We know there’s one major challenge why oil marketing companies have not started importing which is around access to foreign exchange and we are working on this with the Central Bank of Nigeria and as soon as that is available, oil marketing companies will also resume import of petroleum products,” he stated.