By Babajide Okeowo
The Federal Government has disclosed that the cost of Premium Motor Spirit, PMS popularly known as petrol will increase very soon.
Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari at a ministerial briefing on Thursday said the state-owned Oil Company spends between N100 and N120 billion every month to cushion the burden of underpriced sales of petrol, noting that the market price needs to be implemented.
“The price could have been anywhere between N211 and N234 to the 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 paying that cost.
As we speak today, the difference is being carried in the books of NNPC and I can confirm to you that NNPC may no longer be in a position to carry that burden.
That is why early last year if you recall, the full deregulation of the PMS market was announced and we have followed this through until we got to September when prices shifted to N145.
As we speak today, I will not say we are in a subsidy regime but we are in a situation where we are trying to exit this subsidy or underpriced sale of PMS until we get in terms with the full value of the product in the market.
Today, PMS sells across our borders anywhere above N300 at any of our neighbours. And in some places, it is up to N500 and N550 to the litre.
In some countries, Nigerian fuel is their primary fuel. We are supplying almost everybody in the West African region, so it is very difficult to continue this because we have our own issues and that is why the eventual exit from this is completely inevitable.
When that will happen, I do not know. But I know that engagements are going on.
The government is very concerned about the natural impact of price increases on transportation and other consumer segments of our society and as soon as those engagements are taken to a logical conclusion, I am sure that the market price of PMS will be allowed to play at the right time” Kyari said at the ministerial briefing.
This development further lends credence to the earlier speculation that the price of petroleum will be increased soon.
Recall that there was confusion earlier this month when the Petroleum Products Pricing Regulatory Agency (PPPRA) released a template increasing petrol price to N212 per litre. The template was later deleted.