“We need N3.4trillion to subsidise daily fuel consumption – NNPC

The Nigerian National Petroleum Company (NNPC) Limited says the sum of N3.4 trillion is needed to subsidise the 66.7 million litres of Premium Motor Spirit (PMS), otherwise known as petrol, for daily consumption, and not the N4 trillion approved in this year’s budget.

The Chief Executive Officer of NNPC, Mele Kyari, disclosed this at the resumed hearing of the House of Representatives ad-hoc committee investigating subsidy regime from 2013 to 2021 in Abuja, on Monday.

Kyari, who was represented by the NNPC’s Chief Financial Officer, Umar Ajia, said there is currently a N209 subsidy per litre, and with an average of 66.7 million litres, the sum of N3.4 trillion is needed for the year 2022.

He said: “We have about 1.6 billion litres – incoming, land and marine. This is the minimum level we have to maintain, especially as we approach the winter period.  Most of the refineries that we procure from are actually shutting down their operations because of the clamour for green energy and COP-26 compliance”.

Answering the question as to the huge allocation of PMS to States near border towns, the NNPC boss lamented that previous efforts made by Nigerian Downstream and Midstream Petroleum Regulatory Authority to install a system, the ‘Acquila facility’, with a view to forestall illegal transportation of PMS across illegal border, has failed.

The NNPC helmsman also told the committee that the company has resolved to extend the Direct Sales Direct Purchase contract, which was to end in August, 2022, in order to avert fuel scarcity in December as well as during the 2023 general elections.

According to him, “You know the scarcity in Nigeria is really associated with the Christmas period; so, if you now tender, the tendering process will take one or two months. So, what the Board approved that we do is to extend the contract for six months, such that we would have passed the winter and passed the election; otherwise we could have problems during elections”, he emphasised.

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