The Nigerian National Petroleum Company Limited( NNPCL), on Friday, said over N400bn is spent monthly to subsidize the Premium Motor Spirit, also known as petrol.
Its Group Chief Executive Officer, Mele Kyari, disclosed the ongoing Final Cutover from Corporation to NNPC Ltd.
According to Kyari, the company was spending about N202 as a subsidy on every litre of petrol consumed across the country, stressing that about 65 million litres of PMS were pumped daily into the market by NNPCL to keep the country wet.
Although he said the oil company would continue to meet its obligations by providing PMS for Nigeria, Kyari pointed out that the over N400bn monthly subsidy had severely strained NNPCL’s cash flow.
NNPCL is the sole importer of petrol into Nigeria and has continued to play this role for several years, bearing the huge cost of fuel subsidy.
Other private oil marketers stopped importing petrol into Nigeria due to the difficulty accessing the United States dollars required for the imports of PMS.
The NNPCL boss said, “Today, by law and the provisions of the Appropriation Act, there is subsidy on the supply of petroleum products, particularly PMS into our country. In current data terms, three days ago the landing cost was around N315/litre.
“Our customers are here, we are transferring to each of them at N113/litre. That means there’s a difference of close to N202 for every litre of PMS we import into this country. In computation, N202 multiplied by 66.5 million litres, multiplied by 30 will give you over N400bn of subsidy every month.”
Kyari said the continuous funding of petrol subsidy by NNPCL had been ongoing without refunds from the Federal Ministry of Finance, Budget and National Planning, even though subsidy had been budgeted for in the Appropriation Act.
“There is a budget provision for it. Our country has decided to do this. So we are happy to deliver this, but it is also a drain on our cash flow, and I must emphasise this.
“For as we continue to support this, you will agree with me that it will be extremely challenging for us to continue to fund this from the cash-flow of the company when you do not get refunds from the Ministry of Finance,” he stated.
Kyari added, “We are working with them (finance ministry), but it is an extensive pain on the cash-flow of our account. However, we will continue to support this country and deliver energy security.”
(TNT)
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