December 24, 2018

Under-recovery: Fuel subsidy drops to N20 per litre — NNPC

Under-recovery: Fuel subsidy drops to N20 per litre — NNPC

Maikanti Baru

…Says current fuel stock to last till after 2019 elections

By Michael Eboh

The Nigerian National Petroleum Corporation, NNPC, Monday, disclosed that under-recovery of Premium Motor Spirit, PMS, also known as petrol, has dropped to N20 per litre from over N80 a couple of weeks back, noting, however, that the Federal Government was still committed to bearing the additional cost above the regulated price of N145 per litre.

Maikanti Baru

What this means is that if the Federal Government stops subsidizing the price of PMS today, the actual selling price of PMS would rise to N165 per litre.

Addressing newsmen during a tour of petrol stations in Abuja, Group Managing Director of the NNPC, Mr. Maikanti Baru, said the corporation was not deterred by the rising cost of under-recovery and would continue to import PMS into the country to guarantee stability in supply.

READ ALSO: Experts disagree on $60/b benchmark for budget 2019

Baru and his team visited petrol stations at Nyanya, Abuja-Kaduna Expressway, Kubwa and Central Business District, all in the Federal Capital Territory.

Baru also reiterated the effort of the government to ensure stable fuel supply during the Yuletide and beyond, especially in the face of attempts by some individuals to disrupt supply.

Baru disclosed that under-recovery, also known as subsidy, had a couple of months back, risen to about N80 per litre, noting that within that period, the government insisted on bearing the additional cost so as not to bring hardship on Nigerians.

He said, “Today, fuel distribution is not an issue, supply is not an issue and the magnanimity of the President to ensure that despite the disparity between landing cost and pump price, we are able to ensure that every Nigerian had access to sufficient products at government regulated price of N145 per litre. Despite the fact at some point, we had imported PMS with under-recovery of over N80 per litre.

“The worry that we had has been cleared. We also thank the president for maintaining the N145 per litre pump price. During the course of the year, we had times when we brought in products that indicated an under-recovery of almost N80 per litre. This was because when price of crude oil rises, the under-recovery on product price also rises.

”Today, we are having much lower crude oil prices and under-recovery had also gone down significantly to the region of N20 and N25 per litre, depending on what the price is. At $60 per barrel, it is about N25 per litre. We are prepared to continue bringing in the products no matter the under-recovery we incur on the commodity.”

Baru further stated that presently, the country has fuel stock that would last the country for over 60 days, adding that current supply would last the country till after the 2019 general elections.

He said, “At the moment, we have 60 days supply in tank; almost three billion litres of PMS that would last us, without bringing in any extra drop of fuel, another 60 days. We are seeing having products clearly throughout the election period; we have sufficient products. If any unscrupulous individual or group is planning to sabotage supply from now till the election period, we are going to disappoint them. They will be sufficient products, and if any have hoarded, they should better bring it out and put it into the market.”

Also speaking, Assistant Commandant-General, Operations of the Nigeria Security and Civil Defence Corps, NSCDC, Mr. Abdullahi Aminu, commended the NNPC for partnering with security agencies in curbing hindrances to fuel supply.

He said, “We always appreciate good and effective collaboration that would ensure sanity in the oil and gas industry. We want to commend the NNPC for its efforts at curbing the menace of fuel crisis that usually hampers the Yuletide season.

“We are deploying all available resources from Lagos, Ogun and Oyo state on the Right of Way from Atlas Cove to Mosimi, and to Ibadan, to make sure there is no vandalism, no oil theft, no scooping from the right of way.”