The Group General Manager, Nigerian National Petroleum Corporation, Mele Kyari, has disclosed that the Federal Government subsidises Premium Motor Spirit(PMS) with about N120bn ($263.25m) monthly making it unsustainable in the current economic conditions.
Kyari disclosed this at the weekly ministerial briefing at the Presidential Villa, Abuja on Thursday.
He warned that the NNPC could no longer afford to bear the cost, saying Nigerians would have to pay the actual cost sooner or later.
He 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 N211 and around N234 per 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 under-price sale of PMS until we come to terms with the full value of the product in the market.
“PMS sells across our borders anywhere around N300 per litre and in some places up to N500 to N550 per litre.
“Our current consumption is evacuation from the depots about 60 million litres per day; we are selling at N162 to the litre, and the current market price is around N234, actual market price today.
“So, the difference between the two, multiplied by 60 million x 30 will give you per month. I don’t have the numbers now.
“This is a simple arithmetic that we can do but if you want exact from our books, I do not have it at this moment but it is somewhere between N100bn and N120bn per month. I don’t have the exact number.”
When asked when the corporation would stop subsidising petrol, Kyari declined to give a specific date.