The Nigerian National Petroleum Company Limited (NNPCL) has told Nigerians that they can’t buy Premium Motor Spirit, popularly called petrol or fuel, at a pump price of N170 per litre. The Company’s Group Managing Director, Mele Kyari disclosed that NNPCL cannot maintain sales of petrol at N170/L when the landing cost of the product is thrice what it is sold for in the country.
According to Kyari, when petrol comes into the country, the company transfer to marketers at N113 per litre so as to ensure it sells for N165 at the pump.
The NNPCL boss, in Abuja at the Legislative Transparency and Accountability Summit organised by the House of Representatives Committee on Anti-Corruption, explained that there is nowhere today that a litre of petrol can be landed at the pumps at the N445 (to a dollar) exchange rate.
He pointed out that the cost of anything outside the landing cost of petrol is subsidised, and that is why it is impossible to avoid all the wrong practices like round tripping, cross-border smuggling, and document forgery among others in the sector.
Kyari stated, “It is not possible for you to buy fuel at N170 when your actual cost is thrice that value.
“For instance, today, when PMS comes into this country, we transfer to marketers at N113 per litre for us to ensure N165 at the pump.
“So, you must sell at N113 to them to be able to deliver at N165, that means whatever the cost, anything after that value; that is a subsidy. Somebody has to pay for it.
“Everyone knows the price of PMS around the world. There is nowhere today that you can land a litre of PMS to the pumps at the N445 (to a dollar) exchange rate. It is not possible.
“In some places, you are subsidising up to N290 on every litre. With this regime, it is impossible for you to avoid all the wrong things that are happening round-tripping, cross-border smuggling, and document forgery.
“Anywhere you have arbitrage, you will have these issues. As long as arbitrage is there, you will continue to have these issues and you cannot hold NNPC accountable for it because it is a value chain that involves everything and everybody.
“You cannot price it at the market today because of the socio-economic impact on the prices of PMS. Every country is doing something about high energy costs. Some have removed taxes on petroleum, this is a subsidy. NNPC Limited will no longer go to FAAC because we are expected to pay taxes, dividends and royalties.”