Fakoyejo OlalekanThe Minister of State for Petroleum Resources, Timipre Sylva, has disclosed that the Nigerian National Petroleum Company (NNPC) Limited sells petrol at a loss.
Sylva’s claim follows nationwide criticism of President Muhammadu Buhari’s subsidy regime that has gulped trillions of naira as fraudulent. The President doubles as substantive oil minister, only deputized by Mr Sylva as minister of state.
According to the Minister and former governor in Nigeria’s South South state, Bayelsa, so much money is being “burnt” by the NNPC , because the government-owned company is mandated to sell at a loss.
Sylva explained that, to make fuel accessible to Nigerians, the NNPC would naturally sell the Premium Motor Spirit (PMS) far less than the amount it bought it.
Selling at a loss therefore, Sylva said there’s been the need for the NNPC to look for more money to buy the product and cover shortfall or the disparity between purchase and selling costs – the reason fuel subsidy would gulp N3.3 trillion in the first six months of 2023.
Recall that the Buhari government had extended fuel subsidy payment to June, having originally announced plans to remove subsidy in February 2022.
This was based on implementing the Petroleum Industry Act (PIA) but was later shifted to July 2022, before Buhari’s government pushed it into the next administration.
“The management of the supply situation under this subsidy regime is not easy. We must all agree that so much money is being burnt in our cars, but somehow we have to put funds to continue to keep the country wet.
“Sometimes, if you really think deeply, you begin to wonder what magic we are doing to be able to keep this country wet consistently. Considering that you buy something, let’s say for N10, and you are to sell it at a loss.
“And then you are expected to go back to buy the same thing, and come back again to sell it at a loss. So at every point in time you are looking for more money to continue to buy it, because you’re mandated to sell it at a loss,” Sylva said.
He further explained: “if you are a businessman, look at it from this perspective, that you are now in the business where you are mandated to sell at a loss to the public. That is not an easy job, I must tell you.”
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