Petrol subsidy news as the Nigerian National Petroleum Corporation (NNPC) says it pays N120 billion every month to subsidise Premium Motor Spirit (PMS), also known as petrol.
This was disclosed by the NNPC Group Managing Director (GMD), Mr Mele Kyari, at the weekly presidential ministerial media briefing on Thursday at the State House in Abuja, the nation’s capital.
He lamented that the burden placed upon NNPC by the ongoing subsidisation of the cost of petrol in the country was overwhelming.
As a result of the huge sum being paid, Mr Kyari stated that Nigerians would have to pay the actual cost for petrol sooner or later.
He decided that the product was currently being sold below the cost of importation, causing the NNPC to pay the difference.
The NNPC boss, however, refrained from calling the shortfall payment a subsidy, stressing that the fund was paid to maintain the pump price of petrol at the current level.
He stated that the NNPC can no longer bear the monumental cost, saying market forces must be allowed to determine the pump price of petrol in the country in the nearest future.
When asked when the corporation would stop subsidising petrol, Mr Kyari declined to give a specific date.
The payment of petrol subsidy has over time become a bone of contention in the downstream sector and many have argued that it is in the country’s best interest because competition has a way of forcing down prices and ensuring that companies place a tight rein on production cost such that wastes that could be passed on to consumers in form of high prices are eliminated.
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