April 21, 2024


Oredola Adeola


The Nigerian National Petroleum Company Limited (NNPCL) has revealed that the new pump prices of Premium Motor Spirit (PMS) also known as petrol, that it pegged at between N488 per litre in Lagos and N557/l in Borno, are not fixed, but likely to fluctuate based on the market dynamics and the price of crude oil in the global market.



Mr. Mele Kyari, Group Chief Executive Officer (GCEO) of NNPC made this known during an interview on Channel on Thursday while reacting to the reason for the price adjustment from N195 per litre to the new prices nationwide.



Reacting to question on why the NNPCL deliberately jerked up the price without the inputs of stakeholders, Kyari said that the new price template was an internal memo within the NNPC corporate establishment which found its way into public space without official authorisation.



He said,”The template was not an attempt to fix the pump price of petrol. This a complete marketing document that was only meant to serve as a memo within the NNPC network. Every company keeps this record in a market determined framework.


“The amount therein was appropriately calculated based on the market dynamics and passed on to the NNPC retail stations across the country. The price can change the next day.



EnergyDay had earlier published a document listing prices of petrol in different states, confirmed to have been released by the NNPC, in response to the pronouncement made by President Bola Tinubu that petrol subsidy is gone.


The analysis of the new template showed that the new price in FCT(Abuja) increased from N194/l to N537/l, Nasarawa N189/l to N537/l, Plateau from N189/l to N537/l, Kwara from N189/l to N515/l, and Kogi from N189/l to N537/l.


The prices in increased in Benue from N189/l to N537/l, Niger N189/l to N537/l, Adamawa from N199 to N550/l, Taraba from N199 to N550/l, Taraba N199/l to N550/l, Bauchi from N199/l to N550/l, Gombe from N199/l to N550/l, Borno from N199/l to N557/l, Yobe from N199/l to N557/l, Kano from N194/l to N540/l, and Kaduna from N194/l, to N540/l.


Others are Katsina from N194/l to N540/l, Sokoto N194/l to N540/l, Jigawa from N194/l to N540/l, Kebbi from N194/l to N545/l, Zamfara from N194/l to N540/l, Abia from N189/l to N515/l, Imo from N189/l to N515, Anambra from N189/l to N520, Enugu from N189/l to N520/l, Ebonyi from N189/l to N520/l, Rivers from N189/l to N511/l, Akwa Ibom N194/l to N515/l, Akwa Ibom from N194/l to N515/l, Bayelsa N189/l to N515/l, Cross Rivers from N194/l to N511/l, Edo from N189/l to N511/l, and Delta from N189/l to N511/l.


The pump prices for other states are Lagos from N184/l to N488, Ogun from N189 to N500, Oyo from N189/l to N500/l, Osun from N189/l to N500/l, Ondo from N189/l to N500/l, and Ekiti from N189/l to N500/l.


Giving a breakdown of how the prices for all the states were determined, Kyari noted that the prices were estimated based on the cost of evacuating the product from the marine to depots and onward to the various filling stations across the country.


He noted that other petroleum marketing companies are at liberty to determine the prices they feel is right like sell to the customers.



He said, “The NNPC mega stations are therefore going to be competing with other retailers to ensure that customers are getting optimal satisfactions from us at a cheaper price while also treating them with respect.


“One thing is certain; this is the beginning of competition within the sector, as all the players would have to catch up. The product would therefore in a matter of days become cheaper and affordable. We will also be able to have the opportunity to recover the full cost of operation, since the subsidy has been taken away,” the GCEO NNPC said.


Speaking about the benefit of the new price regime to customers, Kyari said that there are premiums being paid to move the product to different locations, this according to him also includes the services and activities provided within the downstream value-chain to customers.


He said, “Customers under the new market regime will enjoy efficiencies of the marketers including the customer/management service system. They will also enjoy trust and satisfaction as well as product availability.



He further noted that the market dynamic is a reality that Nigerians need to come to term with. He encouraged them to urgently adjust it, insisting that the Nigerian Government is not willing to continue to subsidise the consumption of few elites that are less than 10 percent, at the expense of the welfare of over 90 percent of the masses.



He said, “Since there are no resources to finance subsidy, Nigerians should regulate their consumption and buy products that they can afford.


“No going back, President Tinubu has only executed the provisions of the law. It would have happened even before his inauguration, because NNPC has lost the confidence of its supplier. Mr. President has just reiterated the provision of the Petroleum Industry Act (PIA).


Addressing issues of supply shortfalls, hoarding and queues witnessed across the country, the NNPC boss confirmed that the crisis will end by the weekend.


He said, “There are over 800 million liters of PMS in depots and tanks across different stations in Nigeria. This is a guarantee of 30 days regular supply. There is certainty now that the price has been normalized and no one is rushing to get cheaper product. The hoarding of the product by marketers has also vanished because the price is being determined by market realities.



Asked about the impact of the new price on poor Nigerians, the NNPC boss disclosed that it is impossible for the NNPC to be humane with the price of petrol, insisting that the national oil company has the primary responsibility of ensuring that the interest of its shareholders is protected.



He said, “The national oil company is also committed to paying taxes and royalties to the Federation as a private company.



Kyari also revealed that the general objective of subsidy has not been achieved. He added that in the last two to three years, people living in all the border communities across the country have never enjoyed the opportunity to buy PMS at the official prices.


“Instead, they buy at higher prices. The value of subsidy is transferred into the pockets of individuals running the business. Only those in Lagos, Abuja, Port Harcourt, and other major cities have access to getting the product at an official rate.


The NNPC GCEO further acknowledged that not all the average of 66 million litres of PMS quoted by the national company, as daily consumption, are consumed in the country, adding that the arbitrage environment paved the way for smuggling of the products to other neighbouring countries.



He said, “While the fuel is dispensed to customers in Abuja for N185/litre the border communities are getting it at around N500/l.


“This is why the subsidised product is being smuggled to as far as Sudan and other African countries. The fuel in Sudan and other African countries are called “Nigerian fuel” because none of these countries have the logistics to import PMS.


“There is nothing we can do about this. We have about 5000 kilometers of land border. We do not have all the resources to secure them. The issue created by this arbitrage can compromise anything.



” For instance, the margin for traders that truck PMS to Maiduguri from Lagos is about N300,000 for the trader. This profit is then used to pay workers’ salaries and attend to other operational costs.


“Whereas it is more lucrative to smuggle the same volume to other African countries through the porous border and earn an average of 12 Million per truck.


“Because it is cheaper to get Nigerian petrol, we have been saving other countries around us the risk of exposure to the foreign exchange crisis.

“Most of the marketers in these countries do not have to go to the banks to get a letter of credit to import PMS to their countries.  They are not exposed to going to the international market to get the product into their countries.


“That is a double jeopardy that we have been contending with here in Nigeria and once the arbitrage is removed, this crisis will fizzle out. Smuggling will substantially reduce and Nigeria will make good money from this business.


“The Government can then convert the smuggling business into legitimate business by selling at the market rate to all these countries. We will be expanding our businesses to some countries by meeting their energy needs. We have already sealed a supply agreement with Rep Benin, while other countries are ready to talk to us,” Kyari said.