NNPC: We’re back to subsidy regime… N145/litre of petrol is unsustainable

The Nigerian National Petroleum Corporation (NNPC) says the country is back to the subsidy regime, as major importers have refused import fuel despite the availability of foreign exchange. 

Speaking in Lagos on Monday evening, Mele Kyari, NNPC general manager for Crude Oil Marketing Division (COMD), said the problem was no longer that of foreign exchange.

“We have a very difficult business environment. It is impossible today to import products at the current market price, at current fixed foreign exchange,” he said.

“There is no way today you can take products to retailers and sell at N145. It is not possible. If that is true and I believe that it is, because we all go to the market, why can’t we sell above N145? That is where legislation should come in.”

He said the government could not raise the pump price of petrol today, but the current trading regime is not sustainable.

“I also know today that it is impossible for this government to announce tomorrow that petrol is about N150. This government cannot sustain it. That is the truth. The people will not accept that figure.

“That is why suppliers are not importing. It is not FX. We have created a niche market for the FX. I am part of the committee allocating FX. We gave FX. It was rejected. The reason being given is that FX is not enough to import. But that is not true.

“The truth is that marketers go back to the market and land it here, that you are required to sell it at N145 maximum. I am sure they won’t make it. We won’t let you do it today. That is the main reason people are not importing today. It is not FX.”

“Today, we are in subsidy regime, absolutely. There is no way you bring product today and sell at N145 and get back your money, and make profit. That is not possible.

“You can see some marketers saying that fuel is N138. It is because they did not import. Somebody has taken the heat off the price.”

In a tweet on Tuesday, Garba Deen Muhammad, NNPC spokesperson, said the N145 a litre ceiling is sustainable. He said there was no need to panic.

No plan to increase fuel price. Current N145/ltr ceiling sustainable by NNPC due to long term procurement contract.No panic Drive with care

— Garba Deen Muhammad (@garba_deen) October 25, 2016