NNPC restores petrol supply cost to N1.4tn as depot owners sell at N133 official price

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    Exactly six months after the Nigerian National Petroleum Corporation (NNPC) assumed the sole importer of petrol in October 2017 and struggled to meet the country’s need, the corporation has finally normalised the supply of the product, with depot owners now selling at official ex-depot price, THISDAY’s investigation has revealed.

    The corporation’s inability to bridge the supply gap created by the refusal of the private marketers to import petrol, had led to fuel crisis, which marred the Christmas celebration and lingered into the first quarter of 2018.

    However, NNPC’s success was achieved at a great cost to the country as the Minister of State for Petroleum, Dr. Ibe Kachikwu had revealed that the corporation’s under-recovery, which is the loss incurred by selling the imported product at official prices of N133 per litre at the depots and N145 at the pumps, had hit N1.4 trillion yearly.

    Despite the low pump price of N65 paid by Nigerians, there was allegation of massive corruption in the subsidy regime when subsidy claims rose to N1.1 trillion, against the N286 billion budgeted in 2011 by the federal government.
    But the recent revelation by the petroleum minister is an indication that at a pump price of N145, the NNPC incurs a loss of N1.4 trillion yearly to subsidise petrol and ensure that Nigerians get the product at the official N145 pump price.

    Investigation at the weekend revealed that with the NNPC’s efforts, which have ensured that the country is flooded with petrol, some of the depot owners were selling at N133 per litre, against N160, they were selling the product early this year.
    Some marketers, who received the allocation from the NNPC were, however, still selling slightly above the official ex-depot price.
    THISDAY also gathered that the slight increase was not significant to fuel a hike in the N145 pump price.

    For instance, 15 depot owners and six major marketers had stock of petrol at the weekend.
    The 15 depots include, AA Rano, Aiteo, Bound Oil, Bovas, Chi-Pet, D-Jones, First Royal, Folawiyo, Gulf Treasure, Integrated Oil, MRS, Obat, Africa Tanker, Wosbas and NIPCO Plc.
    It was learnt that the major marketers dispense the product to only their dealers at N145 and pay them extra margins to enable the dealers sell at the same N145 at the filling stations.

    But some of the 15 depot owners sell at between N134 per litre and N136.50 per litre, against the N123.28 – N133.28 ex-depot price band recommended by the Petroleum Products Pricing Regulatory Authority (PPPRA) on May 11, 2016 when this current pricing regime took effect.
    The NNPC had on March 5, 2018 announced that it was spending N774 million daily as subsidy on the 50 million litres of PMS consumed across the country.

    The corporation had attributed the huge under-recover to the proliferation of filling stations in communities with international land and coastal borders across the country.
    The Group Managing Director of NNPC, Dr. Maikanti Baru had explained that the multiplication of filling stations had energised unprecedented cross-border smuggling of petrol to neighbouring countries, making it difficult to sanitise the fuel supply and distribution matrix in Nigeria.
    Kachikwu at the weekend restated that the NNPC was spending enormous resources to subsidise petrol.

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    Godwin Okafor is a financial journalist, Internet Social Entrepreneur and the Founder Naija247news Media Ltd He has over 16 experiences in journalism, which cuts across traditional and digital media. He started his journalism career in Business Day, Where he was a senior editorial graphic artist, before he left to start Naija247news, An Online Financial Newspaper in 2010. He has won series of awards and he is the chairman of Emmerich Resources Limited, the publisher of Naija247news.com and also sits on the board of Students In Business Awards, (SIBA).

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