“N1,200”: NNPC Releases Actual Petrol Cost as Filling Stations Adjust Pump Prices
- The Nigerian National Petroleum Company Limited (NNPCL) has disclosed that the federal moderates the price of petrol
- The NNPCL’s Chief Finance Officer, Umar Ajiya, disclosed that the landing cost of petrol is about N1,200 per litre
- He said the Nigerian government asked the NNPC to sell petrol at half the landing cost at N600 per litre
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The Nigerian government and the Nigerian National Petroleum Company Limited (NNPCL) are moderating the petrol price.
The NNPCL disclosed that it has been providing petrol for retail distribution at about half the landing cost under an agreement with the Nigerian government to save Nigerians from the impact of global oil price volatility.
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Landing cost hits N1,200 per litre
NNPC’s Chief Financial Officer, Umar Ajiya, stated that the oil firm has offset the landing price and sale shortfall via a reconciliation arrangement between the government and the oil company.
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He said NNPC had not paid any marketer any money in the name of petrol subsidy in the last eight to nine years.
According to Ajiya, while the pump price of petrol is about N600 per litre, the average landing cost is about N1,200.
With the landing cost at that price, the actual pump price of the product should sell for between N1,300 and N1,500 per litre.
Expert projects actual petrol price
‘We’ve suspected all along that there is some sort of petrol subsidy because you cannot import fuel and sell it that cheap.”
“It is cheap because the ex-depot prices could sell for between N1,300 and N1,400 when the product hits the depots. So, the actual pump prices will not be less than N1,500, give or take,” Energy policy analyst Adeola Yusuf told Legit.ng in an interview.
The NNPC CFO said the company covered about N7.8 trillion in shortfall in the first seven months of this year, differentiating between the current arrangement and the previous subsidy regime.
Ajiya denied that any subsidy is in place, stating that no marketer has been paid in the name of the subsidy.
According to The Nation's report, the NNPC official said the government directs the oil company to sell its petrol imports at half the landing cost.
Per Ajiya, the reconciliation is a shortfall, saying the government sometimes pays the money or nets it off.
Ajiya said:
“We have been importing PMS, landing at a certain price, and the government is telling us to sell it at half price. So, that gap between that landed price and the half price is a shortfall or a subsidy.”
Petrol sells for N1,000 per litre as IMPAN accuses NNPC
Findings show that independent marketers have adjusted petrol pump prices to sell at about N1,000 per litre in Lagos and Ogun.
The marketers blamed the high cost of the commodity on the current scarcity.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) accused the NNPC of being selective in its petrol supply, saying that the oil company neglects the southwest states.
The association appealed to the Nigerian government and other industry stakeholders to ask the NNPC management to rise to the challenge and curtail the current scarcity.
NNPC sends message to Nigerians on ‘return of subsidy
Legit.ng earlier reported that contrary to speculations that President Bola Tinubu has asked NNPCL to use its dividends to defray subsidy costs, the company has refuted claims on the return of subsidies.
In a statement on X, the Group Chief Executive Officer of NNPC Ltd, Mele Kyari, insisted that there are no subsidy payments but that the company is recovering its fuel costs from the federal government.
Reports had emerged that President Tinubu asked the national oil firm to use its dividends to pay for the petrol subsidy following NNPC's request that the government repay the FX differential used for petrol imports.
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Source: Legit.ng
