Why Nigeria Is Still Subsidising Oil Prices – NNPC GMD, Kyari

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, has suggested that the inability to find an appropriate price for petrol has forced the continuation of the subsidy scheme.

The NNPC boss said this while speaking on Channels Television’s Sunrise Daily programme on Tuesday, 29th June 2021.

The Federal Government said in March 2020 that it would allow market forces to dictate the pump price of petrol.

However, after oil prices rose in the preceding months, the Federal Government decided not to adjust the price correspondingly under pressure from organised labour.

And according to Kyari, while petrol’s landing price is about N256 per litre, it sells for N162 to N165 in most parts of Lagos State.

“The reality is that we cannot afford it,” Kyari said.

“But also the second reality is if you don’t do something smart, you could end up throwing prices at Nigerians that are well above prices that they should pay for.

“The engagement is aimed at making sure there is a reasonable level of pricing that we can do that will recover the cost.

“Petroleum consumption in Nigeria is not up to 60 million litres per day, but we supply up to that,” he added.

“We always plan with 60 million litres, because anytime we do below that, there is a crisis.”