Mele Kyari, general managing director (GMD) of the Nigerian National Petroleum Corporation (NNPC), says the company cannot continue to bear the subsidy burden.
The Petroleum Products Pricing Regulatory Agency (PPPRA) had released a template increasing petrol price to N212 per litre — but the template was later deleted.
Speaking during a ministerial briefing on Thursday at the Presidential Villa, Abuja, Kyari said NNPC can no longer bear the burden of underpriced sales of premium motor spirit (PMS), better known as petrol, adding that the market price need to be implemented.
“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.”
The NNPC GMD said the federal government is working to deepen the auto-gas programme which will serve as alternative to petrol.
“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.
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“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.
The resurgence in the price of crude oil bodes well for the Nigerian economy as this will boost the county’s revenue needed for the implementation 2021 budget, improve crude oil receipt and consequently bolster foreign exchange inflows.
However, the prolonged high crude prices would ultimately feed into a climb in petrol’s landing cost — meaning an increase in fuel price. This would further weaken the purchasing power of Nigerians who are already battling with high inflation, unemployment and stuttering economic growth.
