The Minister of State For Petroleum Resources, Ibe Kachikwu, on Thursday said the Nigerian National Petroleum Corporation, NNPC, has incurred a cumulative loss of N85.5 billion in importing petrol and selling at the current retail price of N145 per litre.
Kachikwu said the price was fixed in the first quarter of 2016, when crude oil was selling for $49 and pointed out that with crude price rising to $67 a barrel, the pump price, may no longer be sustainable.
Mr. Kachickwu made the explanation to the National Assembly joint committee on Petroleum Resources ( Downstream).
According to Mr. Kachikwu, the landing cost of PMS which was N133.28 per litre in 2016, is now N171 per litre, which has resulted into stoppage of importation of the product by independent marketers.
This, he said had made the Nigeria National Petroleum Corporation ( NNPC ) to be the 100 per cent importer of the product.
The minister disclosed further that as a result of the N26 difference per litre between the current landing cost of the product ( N171) and pump price of N145, NNPC which had been singularly importing the product at the volume of 25 million litres per day since October last year, has been incurring a daily loss of about N800-N900million, cumulatively reaching N85.5billion today, in just three months.
According to him, already government has mandated him and along with a committee set up to find ways out of the problem which he said requires emergency of about 18 months before the local refineries are expected to be in good shape.
He said three solutions are being considered.
“One , is for the Central bank of Nigeria (CBN) to allow the marketers access forex at the rate of N204 to a dollar as against the official rate of N305 to keep the pump price of fuel per litre at N145.