The Nigerian National Petroleum Corporation (NNPC) is at the receiving end of the fuel subsidy regime and will be the first to benefit once it ends.
This is according to the Group Managing Director of NNPC, Mele Kyari who was speaking during a Zoom meeting today with media executives.
Kyari said the NNPC has been the only one importing Premium Motor Spirit or P.M.S into the country since 2016 and has been bearing the brunt.
“This is happening at the best of our intentions, despite the monumental cost to the Federation,” Kyari said.
The cost is as much as N40 billion – N100 billion per month for under recovery which the NNPC and the country bears.
There is also another hidden cost of Foreign Exchange (FX) which the NNPC gets at N306 per dollar, but the actual market cost is N360 per dollar using the central Bank of Nigeria (CBN) rate or N386 per dollar using NAFEX rate on the Investor and Exporter (I&E) window.
A combination of the two subsidies costs the country up to N2 trillion per annum when oil prices are close to $50 per barrel.
Kyari said a major way to stop smuggling is to sell products at the market price.
“If people can import and sell or produce locally then market forces will take control and this will eliminate smuggling, so it becomes a business and not a criminal enterprise.”
