…landing cost of petrol is N171/L, retails for N145/L
Nigeria’s Minister of State for Petroleum Resources Dr Ibe Kachikwu, has said that the country’s state owned oil firm, the Nigerian National Petroleum Corporation (NNPC) losses N900 million daily for selling petrol at government regulated retail price of N145 per litre.
So far, he said the NNPC has incurred a cumulative loss of N85.5 billion. He explained that the current pump price was fixed in the first quarter of 2016, when crude oil was selling for $49 a barrel and pointed out that with crude price rising to $67 a barrel, the pump price, may no longer be sustainable.
The submission was made at the National Assembly joint committee on Petroleum Resources (Downstream).
Dr Kachikwu explained that the landing cost of petrol which was N133.28 per litre in 2016, is now N171 per litre resulting to stoppage of petrol imports by private marketers and making the NNPC to be the 100 percent importer of the product.
The minister disclosed further that as a result of the N26 difference per litre between the current landing cost and pump price, NNPC which had been singularly importing the product at the volume of 25million litres per day since October last year, has been incurring a daily loss of about N800-N900million, cumulatively reaching N85.5billion in just three months.
Proffering possible ways to resolve the situation, Dr Kachikwu said marketers should be allowed to access forex at the rate of N204/$1 as against the official rate of N305 to keep the pump price of fuel per litre at N145.
Alternatively, is to allow modulated deregulation where NNPC can continue selling at N145 per litre in all its stations across the country while private marketers should be allowed to sell at whatever price is profitable to them, or for the government to consider reintroducing blanket subsidy for all the importers in bridging the gap.