* Pump Price to go up as NNPC says they can no longer bear the burden.
By Festus Fifen
As Nigerians continue to speculate the possible pump price of petrol (Premium Motor Spirit), due to the constant rise of crude oil in the international market, The Federal Government on Thursday disclosed that it currently subsidies cost of Premium Motor Spirit (PMS) with about N120 billion ($263,248 million) monthly.
The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Mele Kyari, made the disclosure while fielding questions from State House Correspondents at the fifth edition of the Special Ministerial Briefings coordinated by the Presidential Communication Team at the Aso Presidential Villa Abuja.
Mele Kyari who stated that the NNPC absorbs the cost differential which is recorded in its financial books
further explained that while the actual cost of importation and handling charges amounts to N234 per liter, the government is selling at N162 per liter which leaves a difference of N72 per litre.
in his words, ”
He, however, said that 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.
Kyari, who avoided calling the payment a subsidy, said the NNPC pays between N100-120 billion a month to keep the pump price at the current levels, insisting that market forces must be allowed to determine the pump price of petrol in the country.
“Our current consumption is about 60 Million litres per day. We are selling at 162 to the liter. Current market price is 234, actual market price today. The difference between the two, multiply by 60million times thirty, will give you per month what we are currently absorbing”
I do not have it from this moment but it’s between N100billion and N120billion per month.
The meaning of this is that consumers are not paying for the full value of the PMS that we are consuming and therefore, somebody is bearing 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 because we can not continue to carry it in our books.
” That is why early last year, the full deregulation of the PSM market was announced and we have followed this through, until we got to September when oil prices shifted above N145, some social issues came up particularly with trade unions and civil societies leading to an engagement between us and organized labour which prevented the eventual implementation of the actual price of petroleum products at that time. Those engagements are continuing and the objectives of those engagement is actually not to prevent deregulation but make sure that there is sufficient framework on the ground to ensure that consumers pay for the actual price of this product and they are not exploited.”
On rational behind investing $1.5 Billion on Port Harcourt Refinery when the public view of the said refinery is that it is archaic, Minister of State for petroleum resources, Chief Timipriye Silver said nothing is wrong with the Port Harcourt Refinery as the maintenance culture has always been the problem.
” It is very sad, I don’t know whether everytime your refinery is develops a fault you must change it, we have always talked about the maintenance culture in Nigeria, we must maintain what we have. Unfortunately there have been some changes in the maintenance of the refinery, but right now we have gotten it right and out refineries are not archaic ”
” The refinery in Port Harcourt is in two parts, the smaller one was built in the 1960s which is not even a very old refinery, the Bigger one 150 bpd, was built by the current president when he was head of state and commissioned in 1989, so a 1989 refinery cannot by any stretch of information me considers an archaic refinery it’s just that we have had some management challenges and this government want to make sure that we put it write and make sure we get our refineries functional”
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