NNPC blames increase in daily petrol consumption to smuggling. — says N256  per litre realistic price for Petrol

Chinazor Megbolu

The Nigerian National Petroleum Corporation (NNPC) has blamed daily increase in consumption of premium motor spirit, popularly called petrol in Nigeria to smuggling across the borders.

The nation’s apex oil and gas corporation also said the increased consumption rose to 102 million litres daily in the month of May.

The Managing Director, NNPC, Mallam Mele Kyari said this during a stakeholders meeting on strategies to curb the twin menace of petroleum products smuggling and crude oil theft which are negatively impacting the country’s economy.

He noted that the corporation was collaborating with the Economic and Financial Crimes Commission (EFCC), Department of State Services (DSS), Nigeria Police Force (NPF), Nigeria Customs Service (NCS), Nigeria Security and Civil Defence Corps (NSCDC) and other security agencies towards curbing the smuggling problem.

According to him; “we all agreed that smuggling is not a business that should be condoned because even for deregulated petroleum products, it brings extra cost burden on this country both in terms of safety and security of supply and in securing of foreign exchange in this country when the product involved is a regulated product like premium motor spirit (PMS).”

Kyari maintained that all industry stakeholders have been asked to collaborate with the NNPC to ensure that the daily national petroleum products consumption which shot up to 102 million litres in the month of May is brought down to realistic levels around 60 million litres.

He explained that it was obvious to all that the volume of petrol was not consumed by Nigerians alone, adding that with the increasing price of crude oil at the global market and the OPEC+ production cuts, Nigeria cannot afford to shoulder the cost of smuggling.

On the current subsidy payment, Kyari noted that with the current exchange rate, the pump price of petrol should be N256 per litre.

“If we are to sell at the market today at current exchange rate, we will be selling the product at about N256 to a litre.

“What we sell today is N162, so the difference is at a cost to the nation.

“I know that so much work is going on, and then we have to manage the volume that we are exposed to between this price of N162 and N256. The difference comes back to as much as N140 billion to N150 billion cost to the country monthly.

“And as long as the volume goes up, that money continues to increase and we have two sets of stress to face, the stress of supply and the stress of foreign exchange for the NNPC.”