SAN FRANCISCO, October 25, (THEWILL) – The Nigerian National Petroleum Corporation (NNPC) has declared that the sale of petrol at the current market price of N145 per litre was unsustainable due to the prevailing exchange rate of the dollar.
This was revealed in Lagos by the Group General Manager, Crude Oil Marketing Division at the NNPC, Mele Kyari, at the 2016 Oil Trading and Logistics (OTL) Conference, stating that there was no way petrol would continue to be sold at the current pump price.
Kyari revealed that despite the preferential exchange rate made available to oil marketers to import petrol, many were reluctant to do so because they would be selling at a loss at the prevalent pump price, hence, a return of subsidy.
Kyari however announced that the present administration would not introduce another increase in the petrol pump price, because Nigerians would not accept it revealing that legislation by the National Assembly would be required for petrol to be sold above N145 per litre.
“We have a very difficult business environment. It is impossible today to import products at the current market price – at the current foreign exchange rate. There is no way today you can take the product to retail and sell at N145. It is not possible today,” he said
“If that is true and I believe that it is true because we all go to the market, why can’t we sell above N145? That is where legislation should come in.
“I also know today that it is impossible for this government to announce tomorrow that petrol is about N150. This government cannot do it. That is the truth. The people will not take that number. That is why suppliers are not importing.
“It is not FX. We have created a niche market for FX. I am part of the committee that allocates FX to marketers. But it is rejected, and the reason being given is that the FX is not enough to import. But that is not the truth.
“The truth is that marketers go back to the international market and land the product here, that you are required to sell it at N145 maximum. I am sure they won’t make it. That is the main reason why people are not importing today. It is not FX.
“Today, are we in a subsidy regime, absolutely. There is no way you can bring products today and take it and sell at N145 and get back your money, and make a profit. That is not possible.
“You can see some marketers saying that fuel is N138. It is because they did not import it. But someone has taken the heat; indeed, we (NNPC) have taken the heat, and you buy from us, so you can afford to go to the market and then put a ridiculous price. It is possible, because they did not import it.
“So the issue is not FX scarcity. As I speak to you, there is stranded FX that nobody is ready to pick. We have closed the chapter on FX.”
Story by Oputah David
