Subsidy Not Sustainable, Says NNPC, As Petrol Price Hike Looms

  • NASS Set To Pass PIB

THE federal government has conceded to committing billions of naira to subsidise the price of petrol on a monthly basis, state oil firm, the Nigerian National Petroleum Corporation (NNPC) revealed on Thursday in Abuja.

Group Managing Director (GMD) of NNPC, Mr Mele Kyari, made the revelation at the 5th edition of the special ministerial briefings coordinated by the presidential communications team.

Mr Kyari

Stating that the cost of the subsidy was covered by the NNPC, Mr Kyari said the actual cost of importation and handling charges amounts to N234 per litre, while the government is selling at N162 per litre.

Although Mr Kyari chose to use the word cost as against the technical term “subsidy”, he stated that NNPC subsidises between N100 and 120 billion a month to keep the pump price at the prevailing price levels.

While stating that this system cannot continue, Mr Kyari said sooner than later, Nigerians would have to pay the actual cost for the commodity, but he stopped short of giving a definite timeline.

It will be recalled that recently, the Petroleum Products Pricing Regulatory Agency (PPPRA) attracted huge criticism when it posted on its website a template indicating a huge jump in the retail price of petrol from about N162.5 to N212.62, a decision which contradicted the assurances by the NNPC that there will be no increment in March. The government later apologised for the contradictions by the two agencies.

PIB to be passed by April
Meanwhile, the federal government has revealed that the Petroleum Industry Bill (PIB) will be passed into law next month (April) by the National Assembly.

Minister of State, Petroleum Resources, Mr Timipre Sylva revealed Thursday while briefing State House correspondents at the Presidential Villa, Abuja.

The PIB has been in existence for over a decade, and is currently before the National Assembly.

Mr Sylva corroborates the Senate President, Senator Ahmad Lawan, who had less than 24 hours earlier made a similar remark when he announced that the Senate was embarking on a three-week Easter break last Wednesday.

According to the Senate President, the committees working on the PIB have been mandated to submit a report upon resumption in April and that the Senate will ensure the bill’s passage as well as other outstanding bills on the constitution review and other important legislations.

Mr Sylva told journalists that the Executive is ready to give the National Assembly all the necessary support to ensure the bill, which is currently at its final stages at the National Assembly, is passed.

The Senate joint Committees on Petroleum Upstream, Downstream and Gas concluded its public hearing on the bill in January.

Since he emerged as Senate President, Senator Lawan had repeatedly expressed his commitment to ensuring a smooth working relationship with the Executive on crucial matters including the PIB which subsequent administrations, from that of Presidents Obasanjo to Jonathan had expressed, would fundamentally reform Nigeria’s petroleum industry.

During the public hearing stage of the PIB, stakeholders had raised several concerns ranging from higher operating expenditure to gender representation. The oil-producing communities in particular demanded 10% equity shareholding as against the 2.5% proposed in the bill.

Residents of oil-producing communities complained that previous assemblies had pegged the equity share holding for host communities at 10% Operating Expenditure but the percentage declined every time the bill was re-considered.

The bill seeks to scrap the Nigerian National Petroleum Corporation (NNPC) and the Petroleum Products Pricing Regulatory Agency (PPPRA).

It also proposes the creation of Nigerian National Petroleum Company Limited – after all the assets and liabilities of the NNPC have been identified by the ministers of petroleum resources and finance, and to establish the Nigerian Upstream Regulatory Commission and the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

The communities had also proposed that they be the beneficiaries of gas flare penalty funds. This, they said, is because these communities, which are the direct recipients of the negative effects, are the ones to receive the gas flare penalty.


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