The cost of petrol could rise to N462 per litre without subsidy, the Group General Manager, Group Public Affairs Division, Nigerian National Petroleum Company (NNPC) Limited, Garba Muhammad, revealed.
Currently, the federal government pays N297 per litre for 68 million litres of petrol consumed daily to reduce the price of fuel at the filling station, but if the government stop subsidising PMS, the price will double.
Recall that the subsidy was scheduled for removal in January, however, President Muhammadu Buhari postponed it for 18 months, and has not planned second quarter of 2023 for the removal. But that is dependent on the new administration after next year’s general election.
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Muhammad, who made this known in a statement on Sunday, also defended the consumption rate disclosed by the NNPC, after the Customs Comptroller-General, Col. Hameed Ali (retd.) faulted the oil company’s claim.
Ali had stated that NNPC can’t scientifically support the 98 million litres/day it claimed to have imported in a year, and only imports 38 million litres of PMS per day, however, Muhammad said 67 million litres had been imported per day between January to August 2022.
“The NNPC Ltd notes the average daily evacuation (Depot truck out) from January to August 2022 stands at 67million litres per day as reported by the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA. Daily Evacuation (Depot loadouts) records of the NMDPRA do carry daily oscillation ranging from as low as 4 million litres to as high as 100 million litres per day.” He explained.
Speaking about petrol and the costNNPC burdens, he said after oil marketing companies’ (OMCs) withdrew from PMS import in 2017, NNPC has been the sole supplier of petrol into the country. In the statement, Muhammad explained that, “rising crude oil prices and PMS supply costs above PPPRA (now NMDPRA) cap had forced oil marketing companies’ (OMCs) withdrawal from PMS import since the fourth quarter of 2017.
“In the light of these challenges, NNPC has remained the supplier of last resort and continues to transparently report the monthly PMS cost under-recoveries to the relevant authorities.
“NNPC limited also notes the average Q2, 2022 international market determined landing cost was US$1,283/MT and the approved marketing and distribution cost of A46/litre. The combination of these cost elements translates to retail pump price of N462/litre and an average subsidy of N297/litre and an annual estimate of N6.5 trillion on the assumption of 60 million litres daily PMS supply. This will continuously be adjusted by market and demand realities.
“NNPC Ltd shall continue to ensure compliance with existing governance framework that requires participation of relevant government agencies in all PMS discharge operations, including Nigerian Ports Authority, Nigerian Midstream and Downstream Petroleum Regulatory Authority, Nigerian Navy, Nigeria Customs Service, NIMASA and all others.” The statement reads.
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