Subsidy’ll end soon, petrol may sell for N234/litre – NNPC GMD

Group Managing Director (GMD) of the Nigerian National Petroleum Corporation, Mele Kyari, has hinted about fuel subsidy regime coming to an end anytime from now.

Indeed, he said the firm could not continue to bear the burden of fuel subsidy, adding that the Premium Motor Spirit otherwise called petrol should be selling between N211 and N234 per litre at the filling station going by the current price of crude oil in the international market, refining cost, transportation with handling cost.

Kyari spoke at a ministerial briefing on Thursday at the Presidential Villa, Abuja, stressing that the NNPC could no longer bear the burden of subsidising petrol, adding that the true market price needed to be implemented.

 

“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 the NNPC and I can confirm to you that the NNPC may no longer be in a position to carry that burden.”

The Petroleum Products Pricing Regulatory Agency (PPPRA) had a couple of days ago released a template increasing petrol price to N212 per litre — but this was later pulled down after critical reactions from the public.

Although the government had come out to say it had no plan to increase petrol price this month, the NNPC GMD said the current subsidized price was unsustainable.

The FG, according to him, is working to deepen the auto-gas programme to serve as an alternative to petrol.

“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.

Kyari also 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 the PMS until we get in terms with the full value of the product in the market.

“Today, the 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.

“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 the PMS will be allowed to play at the right time.”