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  • Nigerians To Buy Petrol N1,000 Per Litre If – DPR

    Nigerians To Buy Petrol N1,000 Per Litre If – DPR

    The Department of Petroleum Resources, DPR, says the pump price of petrol in Nigeria may rise up to as much as N1000 per litre when the petrol subsidy regime comes to an end without an alternative energy source.

     

    DPR Director, Sarki Auwalu, stated this while responding to questions and comments generated by a paper he delivered in Lagos, recently, at the Second Quarter, 2021 Business Dinner of Petroleum Club Lagos.

     

    Responding to the subsidy concerns and the disparity in the petrol consumption figures given by the Nigerian National Petroleum Corporation and the DPR, Auwalu acknowledged that Nigeria was spending so much on petrol subsidy.

     

    He said eliminating it would require making alternative fuel available to Nigerians and that failure to do that could plunge Nigerians into paying higher petrol prices when subsidy is removed.

     

    According to a statement on the DPR website on Monday titled, ‘DPR: Without Alternative Energy, Petrol Price Will Rise On Subsidy Removal’, Auwalu stated that Nigerians may pay as high as N1, 000 to buy one litre of petrol in the country when subsidy on petrol is removed and when the alternative energy or autogas gas policy becomes fully operational.

     

    He, however, said the alternative fuel regime comes with initial cost as it will lead to spending $400 to convert one vehicles from running on petrol or diesel to running on either Liquefied Natural Gas or Compressed Natural Gas.

     

    Auwalu maintained that converting eight million public vehicles currently present in Nigeria to gas-powered will cumulatively cost $3.2 billion to achieve.

     

    He said, “So, to eliminate subsidy, they don’t call it subsidy anymore now, it’s under-recovery of purchase. So, to eliminate under-recovery, what you need is alternative fuel. Without an alternative, you will subject people to higher prices and that is why we go for price freedom.

     

    “As at today, there are 22 million cars in Nigeria. Eight million are for public use. Imagine if you want to convert every car into gas, the average cost of conversion is $400. Converting eight million cars requires $3.2 billion. To do that, there are a lot of environmental investors which can invest and recover from the sale of gas and we are encouraging that.

     

    “Once that is achieved, you will see that PMS can be sold at N1,000. After all, the average distance covered by one-gallon equivalent when you compare it with LNG or CNG with respect to energy for mobility is 2.7 against one. One for PMS, 2.7 for LNG or CNG.

     

    ”So, with that advantage, you will see that it creates an opportunity for this industry again. The issue of subsidy, the volume will all vanish and that is what we are working towards.

     

  • Petrol May Sell For N234 Per Litre as NNPC Can’t Sustain Subsidy, says Kyari

    Petrol May Sell For N234 Per Litre as NNPC Can’t Sustain Subsidy, says Kyari

     

    The General Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, says the company cannot continue to bear the subsidy burden.

     

    The Petroleum Products Pricing Regulatory Agency (PPPRA) had released a template increasing petrol price to N212 per litre — but the template was later deleted.

     

    Speaking during a ministerial briefing on Thursday at the Presidential Villa, Abuja, Kyari said NNPC can no longer bear the burden of underpriced sales of premium motor spirit (PMS), better known as petrol, adding that the market price need to be implemented.

     

    He said NNPC pays between N100-120 billion a month to keep the pump price at the current levels.

     

    “The price could have been anywhere between N211 and N234 to the litre. The meaning of this is that consumers are not paying for the full value of the PMS that we are consuming and therefore someone is paying that cost,” he said.

     

    “As we speak today, the difference is being carried in the books of NNPC and I can confirm to you that NNPC may no longer be in a position to carry that burden.”

     

    The NNPC GMD said the federal government is working to deepen the auto-gas programme which will serve as alternative to petrol.

     

    “That is why early last year if you recall, the full deregulation of the PMS market was announced and we have followed this through until we got to September when prices shifted to N145,” he said.

     

    “As we speak today, I will not say we are in a subsidy regime but we are in a situation where we are trying to exit this subsidy or underpriced sale of PMS until we get in terms with the full value of the product in the market.

     

    “Today, PMS sells across our borders anywhere above N300 at any of our neighbours. And in some places, it is up to N500 and N550 to the litre.

     

    “In some countries, the Nigerian fuel is their primary fuel. We are supplying almost everybody in the West African region, so it is very difficult to continue this because we have our own issues and that is why the eventual exit from this is completely inevitable.

     

    “When that will happen, I do not know. But I know that engagements are going on. The government is very concerned about the natural impact of price increases on transportation and other consumer segments of our society and as soon as those engagements are taken to logical conclusion, I am sure that the market price of PMS will be allowed to play at the right time.”

     

    The resurgence in the price of crude oil bodes well for the Nigerian economy as this will boost the county’s revenue needed for the implementation of the 2021 budget, improve crude oil receipts and consequently bolster foreign exchange inflows.

     

    However, the prolonged high crude prices would ultimately feed into a climb in petrol’s landing cost — meaning an increase in fuel price. This would further weaken the purchasing power of Nigerians who are already battling with high inflation, unemployment and stuttering economic growth.