Subsidy Removal:Petrol Will Be Sold At N462 Per Litre,Says NNPC

Amidst the disagreement between the Nigerian Customs Service (NCS) and the NNPC Limited over the volume of Premium Motor Spirit (petrol) consumed daily,the Group General Manager, Public Affairs Division, Nigerian National Petroleum Company (NNPC) Limited, Garba Muhammad, has stressed that if subsidy is totally removed on Premium Motor Spirit (petrol),the actual selling price will be at N462 per litre.

According to a statement he made on Sunday,Muhammad argued that the government was grubstaking the cost by N297 per litre for the 68 million litres of petrol consumed daily in the country.

It would be recalled that the Customs Comptroller-General, Col. Hameed Ali (retd.), told the House of Representatives Committee on Finance that NNPC supplies more than 38 million litres of PMS per day and that the NNPC cannot scientifically back up its claim of a 98 million litres/day consumption rate.

Arguing against the position of the Customs Comptroller-General,Muhammad opined that over 16.46 billion litres of petrol were imported into Nigeria between January and August 2022, with a daily average of 68 million litres distributed per day.

“The NNPC Ltd notes the average daily evacuation (Depot truck out) from January to August 2022 stands at 67 million 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 disclosed.

Muhammad explained that NNPC has been the sole supplier of the commodity since 2017 when oil marketing companies’ (OMCs) withdrawal from PMS import due to, “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 446/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 NNPC Group General Manager said.