As the debate on whether or not subsidy on Premium Motor Spirit, also known as petrol, should be removed, the minister of State for Petroleum Resources, Dr Ibe Kachikwu, has revealed that the landing cost of the product has risen to N180 per litre that is N35 higher than the pump price of N145 per litre it is currently sold.
The minister who stated this on the NTA Good Morning Nigeria programme, on Tuesday, attributed it to the rise in global crude oil prices.
Although the spokesman of the Nigerian National Petroleum Corporation (NNPC), Ndu Ughamadu could not confirm the figure, he told our correspondents via telephone that only the Petroleum Products Pricing and Regulatory Agency (PPPRA) can give the authentic figure.
“Only the PPPRA has the authentic figures, I am sure the minister must have gotten the figures from them,” he said.
However, it will be recalled that the Group Managing Director, NNPC, Dr. Maikanti Baru had on December 23, 2017, said the landing cost of the commodity was N171.4 per litre when oil price was around $64 per barrel.
When contact on telephone, the spokesman of PPPRA, Apollo Kimchi said he was on leave and could speak on the issue but promised to get details and call back, but at the time of filing this report he has not done so.
But data obtained from PPPRA site indicate that as at March 20, 2018, when the international benchmark price for oil (Brent) was around $66 per barrel, the expected open market price of petrol, was around N189 per litre. The agency has not released any data since then.
Speaking on the live program, Kachikwu recalled the experience of 2016, when the government increased petrol price from N86.5 to N145 after months of severe scarcity, he described fuel subsidy as an emotive issue.
“You have very positive argument that says, ‘Why is this happening; let’s get it out.’ Once you do it, the streets get flooded by protesters. You have five or six or 10 days of no activity in the country. So, any attempt to remove the subsidy must be very well-managed,” the minister said on the NTA Good Morning Nigeria programme, monitored by our correspondent.
He noted that in 2016, the government wrote to the Nigeria Labour Congress and all the trade unions, adding that meetings were held with the security apparatus.
Kachikwu said, “Even when there was a consensus on how we were going to do it, we still had an issue at the very tail end of the moment; NUPENG and PENGASSAN supported but, of course, the other members of the trade unions pulled out.