The Group Managing Director of Nigeria National Petroleum Corporation NNPC, Mele Kyari, says fuel will soon be sold between N211 and N234 per litre because the Federal Government can no longer afford to subsidise the cost of buying petrol in the country.
Kyari disclosed this on Thursday during the weekly presidential ministerial media briefing held at the presidential villa, Abuja.
According to him, the NNPC pays between N100-120 billion a month to keep the pump price at the current level, insisting that market forces must be allowed to determine the pump price of petrol in the country.
He explained that while the actual cost of importation and handling charges amounts anywhere between N211 and N234 per liter, the government is selling at N162 per liter.
Kyari, however, said 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.
“The price could have been anywhere between N211 and 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 someone is paying 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.
“That is why early last year if you recall, the full deregulation of the PMS market was announced and we have followed this through until we got to September when prices shifted to N145
“As we speak today, I will not say we are in a subsidy regime but we are in a situation where we are trying to exit this subsidy or underpriced sale of PMS until we get in terms with the full value of the product in the market.
“Today, PMS sells across our borders anywhere above N300 at any of our neighbours. And in some places, it is up to N500 and N550 to the litre.
“In some countries, the Nigerian fuel is their primary fuel. We are supplying almost everybody in the West African region, so it is very difficult to continue this because we have our own issues and that is why the eventual exit from this is completely inevitable.
“When that will happen, I do not know. But I know that engagements are going on. The government is very concerned about the natural impact of price increases on transportation and other consumer segments of our society and as soon as those engagements are taken to logical conclusion, I am sure that the market price of PMS will be allowed to play at the right time”
Kyari further revealed that petrol is currently being subsidised at the cost between N100 and N120 billion on monthly basis.
The NNPC GMD said government was being considerate of actual impact of the price increase on Nigerians, but also added that market forces must be allowed to determine the pump price of petrol in the country.
This is coming one week after the Federal Government apologized to Nigerians over the recent hike in petrol price which was placed between N209.61 and N212.61 per litre.