The Nigerian National Petroleum Company (NNPC) Limited has insisted that petrol would sell for N462 per litre without subsidy.
It said the average international market-determined landing cost in the second quarter of this year was $1,283 per metric tonne, adding that marketing and distribution cost is now N46/litre.
A combination of the cost elements translates to a retail pump price of N462/litre, an average subsidy of N297/litre and an annual estimate of N6.5 trillion on the assumption of 60 million litres of daily premium motor spirit (PMS or petrol) supply.
It has also insisted that the daily supply of petrol across the country was 68 million litres and offered to submit itself for forensic audit of fuel supply and subsidy management.
This comes following the argument that the NNPC could not scientifically prove the 98 million litres/day consumption it was claiming, as the Customs’ Comptroller-General alleged that the nation’s oil company was supplying an excess of 38 million litres of PMS daily, warranting the over ₦6.34trillion subsidy payment on the commodity annually.
The Group General Manager, Public Affairs Division NNPC, Mr Garba-Deen Muhammad, in a statement in Abuja recalled that between January and August 2022, the total volume of fuel imported into the country was 16.46 billion litres, which translates to an average supply of 68 million litres per day.
He was reacting to last Thursday’s comments by Comptroller-General of Customs, Hameed Ali; who said he found it hard to understand why the NNPC, which put Nigeria’s daily fuel consumption at 60 million litres, releases 98 million litres into the market.
Speaking during an interactive session with the House of Representatives Committee on Finance on the 2023-2025 Medium Term Expenditure Frame and Fiscal Strategy Paper, he said: “If we are consuming 60 million litres of PMS per day by their own computation, why would you allow the release of 98 million litres per day?
“If you know this is our consumption, why would you allow that release?
“Scientifically, you cannot tell me that if I fill my tank today, tomorrow I will fill the same tank with the same quantity of fuel.
“If I am operating a fuel station today and I go to Minna depot, lift petrol and take it to Kaduna, I may get to Kaduna in the evening and offload that fuel.
“There is no way I would have sold off that petrol immediately to warrant another load.
“So, how did you get to 60 million litres per day? That is my question.
“On the issue of smuggling, if you release 98 million litres in actual and 60 million litres is used, the balance should be 38 million litres.
“How many trucks will carry 38 million litres every day? Which road are they following and where are they carrying this thing to?”, he queried.
Minister of Finance, Zainab Ahmed, speaking when she appeared before the panel on August 18, put the projected daily payment for fuel subsidy at N18.39 billion.
“The total amount of subsidy per day is N18.397 billion.
“So, if you are projecting for the full year, it would be N6.715 trillion. If you are projecting for half a year, it would be 50 per cent of that”, she stated.
According to the minister, this was calculated using the information provided by the NNPC.
She said the information showed that 64.96 million litres of fuel are the projected average daily truck out.
She also said N1.774 trillion was paid to independent oil marketers as subsidy in four years.
Yesterday, the NPPC said between January and August 2022, “The total volume of PMS imported into the country was 16.46 billion litres, which translates to an average supply of 68 million litres per day.
“Similarly, import in the year 2021 was 22.35 billion litres, which translated to an average supply of 61 million litres per day”, it added.
The company said rising crude oil prices and PMS supply costs above the NMDPRA cap had caused oil marketing companies’ withdrawal from PMS import since the fourth quarter of 2017.
“In the light of these challenges, NNPC has remained the supplier of last resort and continues to transparently report the monthly PMS cost under-recoveries to the relevant authorities,” she said.
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