Nigerians to buy petrol at N234 per liter soon says NNPC

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Nigerians in no distant time will be buying Premium Motor Spirit otherwise known as petrol for between N211 and around N234 per liter as the Nigerian National Petroleum Corporation (NNPC) has said the N120bn ($263.25m) monthly subsidy spent on the product by the Federal Government is no longer sustainable.

The Group General Manager, NNPC Mele Kyari at the weekly ministerial briefing at the Presidential Villa, Abuja said while the actual cost of importation and handling charges amounts to N234 per liter the government had been selling at N162 per liter therefore bearing the difference.

Kyari said the NNPC could no longer afford to bear the cost, saying Nigerians would have to pay the actual cost sooner or later. He argued that market forces must be allowed to determine the pump price of petrol in the country.

The NNPC boss explained that upon full implementation of deregulation, he expected that all oil marketing companies would commence import, thereby lifting the import burden off the corporation. He said once that was done, the Direct Sale-Direct Purchase programme would end automatically because market forces would then determine import and export.

He said, “Today, NNPC is the sole importer of PMS. We are importing at market price and we are selling at N162 per liter today. Looking at the current market situation today, the actual price could have been anywhere between N211 and around N234 per liter.

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“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 to terms with the full value of the product in the market.

“PMS sells across our borders anywhere around N300 per liter and in some places up to N500 to N550 per liter. Our current consumption is evacuation from the depots about 60 million liters per day; we are selling at N162 to the liter, and the current market price is around N234, 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 a simple arithmetic that we can do but if you want exact from our books, I do not have it at this moment but it is somewhere between N100bn and N120bn per month. I don’t have the exact number.”