During an appearance on Channels Television’s Sunrise Daily on June 29, 2021, Mele Kyari, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), shed light on the persistent oil price subsidy in Nigeria. He pointed out that the challenge in determining a suitable petrol price has led to the continuation of the subsidy program.
In March 2020, the Federal Government announced its intention to let market forces influence the petrol pump price. However, as global oil prices surged in the subsequent months, the government faced resistance from organized labor, prompting them to refrain from adjusting the local petrol price accordingly.
Mele Kyari highlighted the discrepancy, revealing that the landing price of petrol stands at approximately N256 per litre. Despite this, it is sold to consumers at N162 to N165 per litre in most parts of Lagos State.
Kyari emphasized the economic constraints, stating, “The reality is that we cannot afford it.” He stressed the need for strategic actions to prevent burdening Nigerians with excessively high fuel prices. The objective is to strike a balance and establish a reasonable pricing structure that covers the costs incurred.
He also pointed out the disparity between petroleum consumption in Nigeria and the supplied quantity, stating, “Petroleum consumption in Nigeria is not up to 60 million liters per day, but we supply up to that.” This overestimation is a precautionary measure to prevent potential crises in the event of supply falling below the expected level.