The Nigerian National Petroleum Corporation (NNPC) on Monday disclosed that the payment of fuel subsidy or under-recovery by the federal government is no longer applicable, explaining that the pump price of petrol will be determined by the market forces from henceforth.
The corporation maintained that the country cannot accurately ascertain the quantity of the product it consumes everyday because it was impossible to track the destination of trucks leaving the depots.
The Group Managing Director of the national oil company, Mr Mele Kyari, also noted that no cash donation will be given towards the effort against Covid-19 by the petroleum industry, stressing that all contributions will be in kind after participating companies must have gone through their corporate procurement processes.
The Minister of Finance, Mrs. Ahmed Zainab, said the federal government had made a provision of N450 billion for ‘under-recovery’ of cost, although the Petroleum Products Pricing Regulatory Agency (PPPRA) put it at N750.81 billion, about N300.81 billion higher than the amount announced during the public presentation of the 2020 budget details this year alone.
Mr. Kyari, who also insinuated that the country’s crude oil currently has no international buyer, explained that given the quality of the resource Nigeria produces and the relatively short distance to its international buyers compared to its competitors, Nigeria has an advantage.
He said that the current fall in the international prices of crude had given the country an opportunity to ‘liberalise’ the downstream oil industry, which implies that the price Nigerians get all white products from crude oil will now be determined by market forces. He added that with full liberalisation, many things, including determining how much of the product Nigerians consume daily will come to bear, predicting that the pump price of fuel will fall further in the next few weeks.
