By Williams Anuku, Abuja
The Group General Manager (GMD), Nigerian National Petroleum Corporation (NNPC), Mele Kyari, says that the Government is currently subsidizing the cost of Premium Motor Spirit (PMS) also known as fuel with about N120 billion ($263,248 million) monthly.
The disclosure came at the fifth edition of the Special Ministerial Press Briefings coordinated by the Presidential Communication Team.
According to the GMD, NNPC has been absorbing the cost differential which is detailed in its financial statements.
Kyari, further explained that while the actual cost of importation and handling charges amounts to N234 per litre, the government is selling at N162 per litre.
He, however, said that the NNPC can no longer afford to bear the cost, adding that sooner or later Nigerians would have to pay the actual cost for the commodity.
Kyari, who avoided calling the payment a subsidy, said the NNPC pays between N100-120 billion a month to keep the pump price at the current levels, insisting that market forces must be allowed to determine the pump price of petrol in the country.
“Our current consumption is— evacuation from our depots is about 60million litres, per day. We are selling at N162 to the litre. The current market price is N234, the actual market price today. The difference between the two, multiply by a 60million times thirty, will give you per month,” he said.
“This is a simple arrangement you do. If you want exact figures from our book, I do not have them from this moment but it’s between N100billion and N120billion per month.
“We are putting the difference in the books of NNPC and we cannot continue to bear.
“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, the actual price could have been around N211 that you mentioned and around 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, somebody is bearing that cost. 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 because we can not continue to carry it in our books.
“That is why early last year, the full deregulation of the PSM market was announced and we have followed this through until we got to September when oil prices shifted above N145, some social issues came up particularly with trade unions and civil societies leading to an engagement between us and organized labour which prevented the eventual implementation of the actual price of petroleum products at that time. Those engagements are continuing and the objectives of those engagements are actually not to prevent deregulation but make sure that there is sufficient framework on the ground to ensure that consumers pay for the actual price of this product and they are not exploited.”
All these however come as the Federal Executive Council (FEC)recently approved a $1.5m dollars for rehabilitation of the Port Harcourt Refinery.
While the rehabilitation works continue to elicit diverse reactions from Nigerians, the government has justified its position to revamp the refinery and probably concession it to private operators for effective administration.
