NNPC Limited claims petrol will sell at N462/litre without subsidy

The Group General Manager, Group Public Affairs Division, Nigerian National Petroleum Company (NNPC) Limited, Garba Muhammad, has said Premium Motor Spirit (petrol) will be selling for N462 per litre without subsidy.

Muhammad disclosed that the government was offsetting the cost by N297 per litre for the 68 million litres of petrol consumed daily. He made this known in a statement on Sunday.

There had been disagreement between the Nigerian Customs Service (NCS) and the NNPC Limited over the volume of PMS consumed daily, with the NCS stating that the NNPC can’t justify the over N6.34 trillion in annual subsidy payments made on the product.

The Customs Comptroller-General, Col. Hameed Ali (retd.), told the House of Representatives Committee on Finance that NNPC supplies more than 38 million litres of PMS per day and that the NNPC cannot scientifically back up its claim of a 98 million litres/day consumption rate.

Defending the position of NNPC, Muhammad said over 16.46 billion litres of petrol were imported into Nigeria between January and August 2022, with a daily average of 68 million litres per day.

“The NNPC Ltd notes the average daily evacuation (Depot truck out) from January to August 2022 stands at 67 million litres per day as reported by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). Daily Evacuation (Depot loadouts) records of the NMDPRA do carry daily oscillation ranging from as low as 4 million litres to as high as 100 million litres per day”, he disclosed.

Read also: NNPC fails to sell enough crude oil to pay for fuel subsidy

Muhammad explained that NNPC has been the sole supplier of the commodity since 2017 when oil marketing companies’ (OMCs) withdrawal from PMS import due to, “rising crude oil prices and PMS supply costs above PPPRA (now NMDPRA) cap had forced oil marketing companies’ (OMCs) withdrawal from PMS import since the fourth quarter of 2017.

“In the light of these challenges, NNPC has remained the supplier of last resort and continues to transparently report the monthly PMS cost under-recoveries to the relevant authorities.

“NNPC limited also notes the average Q2, 2022 international market determined landing cost was US$1,283/MT and the approved marketing and distribution cost of 446/litre. The combination of these cost elements translates to retail pump price of N462/litre and an average subsidy of N297/litre and an annual estimate of N6.5 trillion on the assumption of 60 million litres daily PMS supply. This will continuously be adjusted by market and demand realities.

“NNPC Ltd shall continue to ensure compliance with existing governance framework that requires participation of relevant government agencies in all PMS discharge operations, including Nigerian Ports Authority, Nigerian Midstream and Downstream Petroleum Regulatory Authority, Nigerian Navy, Nigeria Customs Service, NIMASA and all others”, the NNPC Group General Manager said.

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