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‘We can’t continue subsidy’ — NNPC GMD says petrol may sell for N234 per litre

‘We can’t continue subsidy’ — NNPC GMD says petrol may sell for N234 per litre
March 25
15:56 2021

Mele Kyari, general managing director (GMD) of the Nigerian National Petroleum Corporation (NNPC), says the company cannot continue to bear the subsidy burden.

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The Petroleum Products Pricing Regulatory Agency (PPPRA) had released a template increasing petrol price to N212 per litre — but the template was later deleted.

Speaking during a ministerial briefing on Thursday at the Presidential Villa, Abuja, Kyari said NNPC can no longer bear the burden of underpriced sales of premium motor spirit (PMS), better known as petrol, adding that the market price need to be implemented.

He said NNPC pays between N100-120 billion a month to keep the pump price at the current levels.

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“The price could have been anywhere between N211 and N234 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 paying that cost,” he said.

“As we speak today, the difference is being carried in the books of NNPC and I can confirm to you that NNPC may no longer be in a position to carry that burden.”

The NNPC GMD said the federal government is working to deepen the auto-gas programme which will serve as alternative to petrol.

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“That is why early last year if you recall, the full deregulation of the PMS market was announced and we have followed this through until we got to September when prices shifted to N145,” he said.

“As we speak today, I will not say we are in a subsidy regime but we are in a situation where we are trying to exit this subsidy or underpriced sale of PMS until we get in terms with the full value of the product in the market.

“Today, PMS sells across our borders anywhere above N300 at any of our neighbours. And in some places, it is up to N500 and N550 to the litre.

“In some countries, the Nigerian fuel is their primary fuel. We are supplying almost everybody in the West African region, so it is very difficult to continue this because we have our own issues and that is why the eventual exit from this is completely inevitable.

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“When that will happen, I do not know. But I know that engagements are going on. The government is very concerned about the natural impact of price increases on transportation and other consumer segments of our society and as soon as those engagements are taken to logical conclusion, I am sure that the market price of PMS will be allowed to play at the right time.”

The resurgence in the price of crude oil bodes well for the Nigerian economy as this will boost the county’s revenue needed for the implementation of the 2021 budget, improve crude oil receipts and consequently bolster foreign exchange inflows.

However, the prolonged high crude prices would ultimately feed into a climb in petrol’s landing cost — meaning an increase in fuel price. This would further weaken the purchasing power of Nigerians who are already battling with high inflation, unemployment and stuttering economic growth.

 

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5 Comments

  1. 2k
    2k March 26, 11:10

    Oga continue to bear the burden after all it is our the same money been use for the said subsidy scam story ooo

    Reply to this comment
    • Thompson
      Thompson March 26, 16:33

      Let the government continue to bear the burden as no other thing a common man in Nigerian is benefiting from this government. The government should continue to use our excess crude oil money to subsidise after all our budget is based on 40dpb and we now sell higher

      Reply to this comment
    • Ake
      Ake March 27, 01:19

      How many times will this subsidy be removed,this government is not sincere at all, useless and corrupt govt ever God will judge you

      Reply to this comment
  2. Jef
    Jef March 26, 17:48

    The problem with this country is that of policy inconsistencies and fraud. If the GMD claims that PMS is deregulated, why is NNPC the sole importer of PMS and other fuels. Why are other players not allowed into the market to allow market forces to come to play. NNPC is currently holding on the monopoly they intend to hand over to Dangote when his refinery eventually comes on stream. So they should continue to bear the cost of the evil plans and wickedness against the ordinary citizens until they fix our refineries or they should allow individuals and private companies import fuel to create competition in the market and stop the evil monopoly they are planning.
    Any labour leader who allows the introduction of this wicked increase in pump price for the sake of sentiments shall be cursed for life.

    Reply to this comment
  3. Mummy Pastor
    Mummy Pastor March 27, 00:08

    God will help NNPC to continue with the subsidy for Petroleum, Nigeria should be able to repair her own refineries, so we can refine our own oil in Nigeria.
    Those who have the capability go have a medium scale refinery should be encouraged and assisted by the govt.

    Reply to this comment

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