“Petrol may sell for below N87 next year.” – NNPC Group General Manager Bello Rabiu
Petrol may sell for less than N87 next year when a new template being proposed by the Nigerian National Petroleum Corporation (NNPC) and the Petroleum Product Pricing Regulatory Agency (PPPRA) comes on stream.
Speaking to journalists in Abuja yesterday, the corporation’s Group General Manager, Corporate Planning and Strategy, Bello Rabiu, said that as at Thursday, the cost of bringing one litre of petrol to the country was N65.
He added that the logistics for bringing it to the depot and to the filling stations is about N10.55 and the distribution cost N15.49 which brings the price to about N92.52/litre.
“Now, if you take away N87, which is regulated price, it means that subsidy is basically N4.85. If we are consuming 41 million litres, it means we are subsidizing N200 million a day,” Rabiu said.
“If we can look at this one that is N91.52 and we pray we can get about N15 off there, that will bring it down to a little more or less than N80. If we take off N10.50, we come down to N81. If we take it down to N7.52, we come down to N85. So you can see that the price we have today, if we look at the template can come down, and many Nigerians will believe that there is no subsidy.”
He added: “Looking at this cost of N91.52 per litre, you can see it is what has been in place since 2000 to 2002, which looks to have been over-inflated.”
“So, looking at the template itself, another thing we are doing is how we can optimise that one. As nature will have it, the market itself is reducing the cost because three years ago, this N65 cost of bringing to Lagos was actually about N71. Now it has come down to N65 and it will go down again.
“So, if we actually optimise that template and reduce the template, that will reduce the total cost of import and there will be no subsidy in the country.”
According to him, “the government has already seen the possibility of reducing the cost by an average of N10.” Rabiu disclosed that the new Petroleum Products Pricing Regulatory Agency (PPPRA) would release its new price template before the end of first quarter next year.