Petrol Import Costs Fully Recovered, NNPCL Insists

The Nigerian National Petroleum Company Limited (NNPCL) has said it recovered full costs from the products it imports into the country.

The company also dismissed any insinuation with regard to return to petrol subsidy.
Chief corporate communications officer, NNPC Ltd, Olufemi Soneye, told our Correspondent that since the ousting of petrol subsidy by President Bola Ahmed Tinubu, the subsidy regime has ceased to exist.

“It is important to emphasise that the subsidy is no longer in place. Contrary to allegations, petrol subsidy has not been reinstated.” Soneye affirmed during the conversation.

This is coming after the chief executive officer of Rainoil Limited, Gabriel Ogbechie, reportedly said the federal government has resumed the payment of the controversial fuel subsidy following the devaluation of the Naira in the foreign exchange market.

Ogbechie, was said to have made this statement on Tuesday during the Stanbic IBTC Energy and Infrastructure Breakfast Session held in Lagos.
He pointed out that, with Nigeria’s daily fuel usage at 40 million litres and the foreign exchange rate at N1,300, the government’s subsidy per litre of fuel falls between N400 and N500, culminating in a monthly total of approximately N600 billion.

“When Mr. President came in May last year, one of the things he said is that Subsidy is gone. And truly subsidy was gone because immediately the price of fuel moved from 200 to 500 per litre. At that point, the subsidy was gone.

“During that period, the dollar was exchanging for N460, but a few weeks later, the government devalued the exchange rate. And the dollar moved to about N750. At that point, subsidy began to come back.

“The moment the two markets officially closed, the market went to about N1,300. At that point, that conversation was out of the window. Subsidy was fully back on petrol. If you want to know where petrol should be, just look at where diesel is. Diesel is about N1,300 and petrol is still selling for N600.

“So I can tell you for free that there is at least N400 or N500 litres subsidy on petrol today. If you look at our daily consumption, say 40 million litres, and we’re spending N500 per litre, that is about N20 billion every day, N600 billion every month and N7.2 trillion yearly depending on how we look at it. So, subsidy is definitely back on petrol,” he said.

Furthermore, he said that NNPC being the only petrol importer in the country implies that there is an ongoing subsidy, as prices had to be fixed.

“And if you look at it, NNPC remains the sole importer of petrol in this country because there is subsidy on petrol so the price has to be pegged,” he added.

However, an industry source with knowledge of the Petroleum Industry Act (PIA), explained to our Correspondent that the law vested key responsibility on NNPCL.

According to the source who wouldn’t want to be named, the PIA vested the responsibility of ensuring energy security at any given time on the NNPCL.

“The law is clear. Should there be any gap the NNPCL is required to fill the gap until there is resolution of the issue such that the country is not thrown into turmoil.

“The arithmetic on recovery is between the government and the NNPCL but the company is expected to draw from its profit to keep the country running and this is very clear,” he said.