The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kolo Kyari has stated that it is natural for pump prices to soar and for consumers to bear the burden when subsidy is removed.
Kyari said this in response to a question he was asked regarding the legality of marketers increasing the price of Premium Motor Spirit (PMS) popularly referred to as petrol that they already had in stock before the declaration by President Tinubu on Monday in an interview monitored by our correspondent on Channels TV.
“I think it is natural because it does happen. It may not be intentional but it happens under every circumstance.
“When you have the cheap price at hand and you now sell it 2 to 3 times the price you purchased, you will have to go back to the market. So when you go back to the market to procure new supply, you are going to buy at the new price which literally will make your gain clearly marginal because for you to continue that business you have to add money to buy in the next market. It is not really substantial except those who decide they are done with.
“Unfortunately, yes the customers have to bear the burden,” he said.
Speaking further, Kyari said the removal of subsidy will only affect the sale of petrol for now.
“The impact of the current policy is only on Petrol. It won’t affect other products.
“All other products are actually deregulated, aviation fuels and every other petroleum products are actually deregulated,” Kyari noted.
When questioned on the possibility of prices going higher than they are now, Kyari responded that, “it is very unlikely but potentially Nigerians can expect to pay lower prices.
“Petroleum is priced in the international market and we have no control over the price of this commodity in the international market.
“What this situation has brought is potentially some form of efficiency to come into the system. What you don’t have control over is the price of this commodity in the international market. Whereas many things you have control over. The ability to get it at the cheapest possible rate and that’s a factor of many things, your ability to negotiate good contracts for your marine activities, depot activities, all the way to the fuel station with companies to compete in that space,” he concluded.
Similarly, the GCEO also noted that there is no provision for funding of subsidy in the 2023 budget.
Kyari clarified this when he met with the All Progressive Congress (APC) National Working Committee (NWC) at the party’s National Secretariat.
According to him, “There was a subsidy in 2022 but in 2023, not a single naira was provided for the purpose of financing the subsidy.
“And ultimately while we held back our fiscal obligations, we still have a net balance of over N2.8 trillion that the federation should have given back to the NNPC.
“For any company, when you have negative N2.8 trillion, there is no company in the whole of Africa that will lend to you, you cannot have receivables.
“The provision of subsidy is there, but absolutely there is no funding for it,” Kyari said.
He added that the subsidy constituted a huge amount of money which the country might not be able to survive and pay its debts.
Follow us on Facebook/ twitter
