The Nigerian National Petroleum Corporation (NNPC) says it can no longer bear the monthly N120 Billion cost of Premium Motor Spirit, PMS.
The Group Managing Director of the NNPC, Mele Kyari, gave the indication at the weekly presidential ministerial media briefing featuring Minister of State for Petroleum Resources, Timipre Sylva, at the presidential villa, Abuja on Thursday.
He said the product is currently being sold below the cost of importation, causing the NNPC to pay the difference.
While refraining from calling the payment a subsidy regime, Kyari said the NNPC pays between N100-120 billion a month to keep the pump price at the current levels.
But he declared that the corporation can no longer bear the cost as market forces must be allowed to determine the pump price of petrol in the country.
The GMD said: “Today, NNPC is the sole importer of PMS, we are importing at market price and we are selling at N162 per litre today. Looking at the current market situation today, the actual price could have been anywhere between 211 to around 234 naira to the litre.”
“The meaning of this is that consumers are not paying for the full value of the PMS that we are consuming and therefore, someone is bearing that cost.
“As we speak today, the difference is being carried on the books of the NNPC and I can confirm to you that the NNPC may no longer be in the position to carry that burden and because we can longer afford to carry it on our books.
“As we speak today, I will not say we are in subsidy regime but we are in a situation where we are trying to exit this underprice sale of PMS until we come in terms of the full value of the product in the market.
“PMS sells across our borders anywhere around N300 to the litre and in some places up to 500 to N550 to the litre.
The Minister of State for Petroleum Resources, Timipre Sylvia, also gave an update on happenings in the nation’s petroleum sector.
He disclosed that the Petroleum Industry Bill (PIB) currently before the National Assembly would be passed in April.