The Group General Manager, Nigerian National Petroleum Corporation (NNPC), Mele Kyari, on Thursday disclosed that the Federal Government subsidizes Premium Motor Spirit (PMS) with about N120bn ($263.25m) monthly.
He said while the actual cost of importation and handling charges amounts to N234 per litre the government had been selling at N162 per litre therefore bearing the difference.
He said the NNPC could no longer afford to bear the cost, saying Nigerians would have to pay the actual cost sooner or later.
Kyari said, “NNPC importing PMS at market price & selling at N162/L. The actual market price should be between N211 and N234/L. Meaning is that consumers are not paying the market price. The difference is being carried in the books of NNPC, and we may no longer be able to carry that burden.
“NNPC currently sole importer of PMS, and we’re trying to exit the underpriced sale of PMS. Eventual exit is inevitable, when it will happen I cannot say, but engagements are ongoing because the government is cognisant of the implications.
He argued that market forces must be allowed to determine the pump price of petrol in the country.