Nigeria National Petroleum Company Limited (NNPCL), formerly NNPC Group Managing Director, Mele Kyari, has disclosed that it is impossible to sell fuel at N170 per liter and to avoid all wrongs done in the oil sector.
Newsonline reports that Kyari, said all countries of the world sell patrol at prices higher than what is sold in the country. He added that such a low price could not be possible without a subsidy.
The NNPCL GMD Kyari, stated this at the Legislative Transparency and Accountability Summit organized by the House of Representatives Committee on Anti-Corruption in Abuja on Wednesday.
Kyari stated, “It is not possible for you to buy fuel at N170 when your actual cost is thrice that value.”
Giving an analysis of what it cost the company to sell at a lower rate to marketers, Kyari said, “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.
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“So, you must sell at N113 to them 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.”
He added that “everyone knows the price of PMS around the world. There is nowhere today that you can land a liter of PMS to the pumps at the N445 (to a dollar) exchange rate. It is not possible.”
Speaking on the crimes in the oil sector which have become a costly leakage for the country’s revenue, the GMD, NNPCL added, “In some places,” he said, “you are subsidizing up to N290 on every liter. With this regime, it is impossible for you to avoid all the wrong things that are happening – round-tripping, cross-border smuggling, 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.”
He further added, “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, dividends and royalties.”
