The Group Managing Director of Nigerian National Petroleum Company (NNPC) Limited, Mele Kyari, has said that the N170 per litre of petrol is no longer sustainable due to the landing cost of the commodity.
Kyari, who spoke during the Legislative Transparency and Accountability Summit organised by the lawmakers, said “It is not possible for you to buy fuel at N170 when your actual cost is thrice that value.
“For instance, today, when PMS comes into this country, we transfer to marketers at N113 per litre for us to ensure N165 at the pump.
“So, you must sell at N113, then to be able to deliver at N165, that means whatever the cost, anything after that value; that is subsidy. Somebody has to pay for it.
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“Everyone knows the price of PMS around the world. There is nowhere today that you can land a litre of PMS to the pumps at the N445 (to a dollar) exchange rate. It is not possible.
“In some places, you are subsidizing up to N290 on every litre. With this regime, it is impossible for you to avoid all the wrong things that are happening – round tripping, cross-border smuggling, and document forgery.
“Anywhere you have arbitrage, you will have these issues. As long as arbitrage is there, you will continue to have these issues and you cannot hold NNPC accountable for it because it is a value chain that involves everything and everybody.
“You cannot price it at the market today because of the socio-economic impact on the prices of PMS. Every country is doing something about high energy costs. Some have removed taxes on petroleum; this is a subsidy. NNPC Limited will no longer go to FAAC because we are expected to pay taxes, dividend and royalty.” Kyari told the lawmakers.