The Federal Government of Nigeria, through the NNPC, has said it can no longer afford to pay subsidies for Premium Motor Spirit (PMS) hence the planned increment of pump price from N162 to N234 per litre.
The Group Managing Director of Nigeria National Petroleum Corporation (NNPC), Mele Kyari, said subsidy currently costs the corporation N120 billion monthly.
Kyari revealed that the actual cost of importation and handling charges amounts to N234 per litre but the government’s previous decision to sell at N162 per litre meant that the NNPC absorbed the cost differential as recorded in its financial books.
Kyari added that since NNPC could no longer bear the cost, sooner or later Nigerians would have to pay the actual cost for the commodity.
According to the GMD, the NNPC pays between N100 billion and N120 billion a month to keep the pump price at the current levels.
He said that market forces must be allowed to determine the pump price of petrol in the country.
“Our current consumption (evacuation) from our depots is about 60million litres per day. We are selling at N162 a litre. Current market price is 234, actual market price today.
“The difference between the two, multiply by 60million, times thirty, will give you per month.
“This is a simple calculation you do. If you want exact figures from our book, I do not have it from this moment but it’s between N100billion and N120billion per month.
“We are putting the difference in the books of NNPC and we cannot continue to bear,’’
This update comes barely a week after the Petroleum Products Pricing Regulatory Agency (PPPRA) posted a template that recommended the price of PMS to be retailed between N209.61 and N212.61 per litre.
The NNPC denied the increase and assured Nigerians that the pump price would not be changed.