The Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, has disclosed the reason the corporation has continued with the subsidy scheme despite the massive landing cost of petrol in the country.
Disclosing this on Tuesday, 29th June while appearing on Channels Television’s Sunrise Daily, Kyari said the inability to find an appropriate price for petrol has forced the continuation of the subsidy scheme.
Recall that NNPC which is the sole, official importer of petroleum products into the country has been taking the hit from the increase in landing price of petrol.
The landing price of petrol which is about N256 per litre, according to Kyari sells for N162 to N165 in most parts of Lagos.
Following this rise, the Federal Government in March 2020 was forced to say it would allow market forces dictate pump price of petrol.
However, after oil prices rose in the preceding months, the Federal Government decided not to adjust the price correspondingly under pressure from organised labour.
“The reality is that we cannot afford it.
“But also the second reality is if you don’t do something smart, you could end up throwing prices at Nigerians that are well above prices that they should pay for.” Mr Kyari said.
“The government is still engaging with organised labour and other stakeholders on how to properly price the product.
“The engagement is aimed at making sure there is a reasonable level of pricing that we can do that will recover the cost,” he said.