The Minister of State for Petroleum, Ibe Kachikwu has said the Nigerian National Petroleum Commission (NNPC) has incurred a cumulative loss of N85.5 billion in three months; (about N800-N900million daily), on importing and selling fuel at N145 per litre. This is even as Trinidad and Tobago with population the size of Bayelsa State spends about 64 billion Naira in 5 months on the same purpose.
Kachikwu in a meeting with the National Assembly joint Committee on Petroleum Resources (downstream) said losses were de to the N26 difference per litre between the current landing cost of the product (N171) and pump price of N145. This is even as Trinidad and To
At the first quarter of 2016, crude oil was selling at $49, and landing cost of Premium Motor Spirit (PMS) was N133.28 per litre.
With the crude oil rising to $67 per barrel, and landing cost of N171 per litre, independent marketers have stopped importing the product, leaving NNPC as the sole importer.
Kachikwu also noted that, by importing the product at a volume of 25 million litres per day since October 2016, the Commission is running at loss so that Nigerians can enjoy petroleum products at a regulated price.
The General-Managing Director of NNPC, Maikanti Baru, also present at the meeting, said the scarcity was a result of hoarding by unscrupulous marketers and diversion of product from depots by tanker drivers to neighbouring Countries at higher prices.
Baru also stated that before the scarcity, NNPC had 9 billion litres in reserve which was later emptied due to panic buying from citizens, after a rumoured price hike on Social Media.
The one-day strike embarked on by Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), and the diversion and hoarding of some players in the industry was a major factor for scarcity. He said.
Nigeria is not the only Country which regulates petroleum products for it citizens, as others like Saudi Arabia, Kuwait, Bolivia, Iran, Egypt, Bahrain, Unites States of America, among others do same.
On 26 December 2010, the Bolivian government issued a decree removing subsidies which had fixed petrol/gasoline and diesel prices for the past seven years. Arguing that illegal exports (contraband) of gasoline and diesel fuel to neighboring countries by individuals for personal profit was harming the economy. Bolivia eliminated the subsidies and raised gasoline prices as much as 83%. After widespread labor strikes, the Bolivian government cancelled all future planned price hikes.
Trinidad and Tobago, through its National energy agencies, Petrotrin and the Trinidad and Tobago National Petroleum Marketing Company Limited, offers petroleum at varying subsidised prices to the users within the country.
Unleaded Gasoline is offered at two grades – Ron 91 at US$0.43/Litre and Ron 95 at US$0.91/Litre. Diesel is offered at US$0.24/Litre, making this fuel some of the cheapest in the world.
There are an estimated 791,086 cars in the Country as at February 2015, consuming 1.2 billion litres of liquid fuel annually. The Government of Trinidad and Tobago spent an estimated US$173.2 million in subsidies for gasoline and diesel in a half year period October 2014 – March 2015.
Venezuelan state-owned company, spends US$1.7 billion in direct costs of importation of gasoline, and subsidizes all sales of gasoline in the internal Venezuelan market.
The sale price of gasoline is US$0.015 per litre, on a fixed price in the local currency, that has been in effect since 1997. Given the low price of gasoline, it is distributed free of charge to gas stations.
