Petrol is currently being subsidised at the cost between N100 billion and N120 billion on monthly basis, the Group Managing Director of Nigeria National Petroleum Corporation, NNPC, Mele Kyari, has stated.
Kyari revealed this while fielding questions from State House reporters at the fifth edition of the Special Ministerial Briefings coordinated by the Presidential Communication Team held in Abuja on Thursday.
According to Kyari, NNPC absorbs the cost differential which is recorded in its financial books adding that while the actual cost of importation and handling charges amounts to N234 per litre.
He said market forces must be allowed to determine the pump price of petrol in the country.
He however added that government was being considerate of the actual impact of the price increase on Nigerians.
This confirms speculations that the government might resume payment of fuel subsidy due to increase in the global price of petrol.
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Since January the price of the international oil benchmark, Brent crude, has been on an upward trajectory, rising from $41.51 per barrel to close at $70 per barrel on March 8.
Fuel marketers had in December expected another upward adjustment of PMS prices to reflect the further rise in crude oil prices.
The NNPC GMD said the corporation could no longer bear the burden of the product currently being sold at N162 per litre.
He spoke after the Minister of State for Petroleum Resources, Timipre Sylva, had briefed on the efforts to ensure the passage of the Petroleum Industry Bill (PIB).
The NNPC, which has been the sole importer of petrol into the country in recent years, is still being relied upon by marketers for the supply of the product despite the deregulation of the downstream petroleum sector.
The Minister of State for Petroleum Resources, Chief Timipre Sylva, had last month said that Nigerians should prepare for the pain associated with the increase in crude oil price.
According to him, as desirable as the increase in oil price is, it has serious consequences as well on petroleum product prices.