Business

Nigeria spends N150bn monthly as fuel subsidy – NNPC GMD

*Says PMS should sell for N256 per litre

Group Managing Director (GMD) of Nigerian National Petroleum Corporation (NNPC), Malam Mele Kyari, says Nigeria spends between N140 and N150 billion monthly to subsidise cost of fuel.
He made the disclosure in Abuja at a stakeholders parley to work out synergy to tackle incidents of smuggling of petroleum products but criminals.
Commenting on the current PMS and subsidy payment, Kyari explained that with the current exchange rate, the pump price of petrol should be N256 per litre.
“If we are to sell at the market today at current exchange rate, we will be selling the product at about N256 to a litre. What we sell today is N162, so the difference is at a cost to the nation,’’ he said.
According to him, with the high volume of daily consumption, the country cannot sustain subsidy payment adding “as long as we don’t regulate volume, until we are able to exit this current level, which I know so much work is going on, then we have to manage the volume that we are exposed to between this price of N162 and N256”.
He said: “The difference comes back to as much as N140 billion to N150 billion cost to the country monthly. As long as the volume goes up, that money continues to increase and we have two sets of stress to face, stress of supply and stress of foreign exchange for the NNPC. We may not see foreign exchange cheque taking place for importation,’’ he said.
Meanwhile, Minister of State for Petroleum Resource, Chief Timipre Sylva has called for synergy between the Nigerian National Petroleum Corporation (NNPC), Petroleum Equalisation Fund (PEF), Petroleum Product Pricing Regulatory Agency (PPPRA), the Economic and Financial Crimes Commission (EFCC) and other security agencies in the country to tackle the increasing smuggling of Premium Motor Spirit (PMS) across the nation’s porous borders.
Speaking at a stakeholders meeting organised by the Nigeria National Petroleum Corporation (NNPC), in Abuja, on how to best to stop smuggling in the country, on Tuesday, Chief Sylva said the only solution to halting the criminality surrounding the smuggling of PMS is for all stakeholders to work together to ensure that the trend is halted.
NNPC, on Tuesday put the consumption of PMS at 103 million litres per day in the month of May.
He said: “I will like to put it on record that whatever we are trying to do in the area of deregulation will not make sense without us exactly knowing the actual consumption of PMS.
“When I first came in as minister, I was informed that the daily consumption in the country was around 60 to 62 million litres a day, which to me sounded a little bit outrageous considering the number of cars we have on the road.
“But somehow, the figures, I understand today have come down to around 52 million litres, may be the number of vehicles have suddenly reduced, but you will agree with me that something is wrong that is why the tracking of trucks loading products is essential for us to move forward on this issue of subsidy removal,’’ the minister said.

 

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