NNPC Kyari justifies increasing fuel price in Nigeria

Dr Mele Kyari, Group Managing Director of Nigeria National Petroleum Corporation, NNPC, has revealed that Premium Motor Spirit, PMS, popularly known as fuel, will soon be sold for two hundred and thirty-four naira (N234) per litre.

The GMD of NNPC stated that the increase in petrol prices is necessary because the government can no longer bear the cost of subsidizing the product’s cost.

Dr Kyari stated that while the current price of PMS is N162, the actual price should range between N211 and N234 per litre. He claimed that the Nigeria National Petroleum Corporation is paying the difference between the actual price at which petrol should be sold and the current price, which the corporation cannot sustain.

The NNPC Group Managing Director, who disclosed this during a press conference on Thursday in Abuja, stated that private marketers will be given the opportunity to import petrol products into the country, with market forces determining the price.

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He stated that NNPC cannot continue to be the sole importer and bear the high cost of subsidizing, which is harming both the corporation and the economy as quoted by NationalWatchng.
Dr Mele Kyari stated, “Today, NNPC is the sole importer of PMS; we import at market price and sell at N162 per litre.” Given the current market conditions, the actual price could have ranged from 211 to around 234 naira per litre.

“What this means is that consumers are not paying for the full value of the PMS that we consume, and as a result, someone is bearing that cost.

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

 

“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.”