Nigeria state-oil firm NNPC loses 85.5 bln naira on fuel imports

Nigeria's state-run oil firm, Nigerian National Petroleum Corporation, NNPC has incurred a total loss of 85.5 billion naira in importing petrol and selling at a fixed retail price of 145 per litre, minister of petroleum, Ibe kachikwu has said.
Kachikwu said the price was fixed in the first quarter of 2016 when crude oil was selling for $49/barrel and pointed out that with the crude price rising to $67 a barrel, the pump price, may no longer be sustainable.
Kachickwu made the explanation to the National Assembly joint committee on Petroleum Resources ( Downstream).
According to Kachikwu, the landing cost of PMS which was N133.28 per litre in 2016, is now N171 per liter, which has resulted into stoppage of importation of the product by independent marketers.
This, he said had made the Nigeria National Petroleum Corporation ( NNPC ) to be the 100 percent importer of the product.
The minister disclosed further that as a result of the N26 difference per litre between the current landing cost of the product ( N171) and pump price of N145, NNPC which had been singularly importing the product at the volume of 25million litres per day since October last year, has been incurring a daily loss of about N800-N900million, cumulatively reaching N85.5billion today, in just three months.
According to him, already the government has mandated him and along with a committee set up to find ways out of the problem which he said requires emergency of about 18 months before the local refineries are expected to be in good shape.
He said three solutions are being considered.
” One is for the Central bank of Nigeria ( CBN) to allow the marketers access forex at the rate of N204 to a dollar as against the official rate of N305 to keep the pump price of fuel per litre at N145.
” Two,to give room for modulated deregulation where NNPC would be allowed to continue selling at N145 per litre in all its mega stations across the country while the independent marketers should be allowed to sell at whatever price is profitable to them in all their outlets.
” Three, to look at the direction of blanket subsidy for all the importers in bridging the gap which would be like going back to a problem that had earlier been solved “, he said.
He, however, stressed that the final solution to the problem was for the nation to put her refineries in good shape in a way that 80 percent of local consumption of the product should be provided for locally.