The Group Managing Director of the Nigerian National Petroleum Corporation, Mallam Mele Kyari, has said the price of petrol should be more than N280/litre at which Automotive Gas Oil, also known as diesel, is being sold.

Kyari said smuggling of petrol from Nigeria had impacted negatively on the Nigerian oil sector but added that this would not lead to another closure of the borders.

He said on Tuesday during a programme on Channels Television that efforts were rather being made to curb smuggling.
The NNPC boss said although petrol evacuation by NNPC in Nigeria was currently about 60 million litres daily, the corporation was sure that consumption was not up to that volume.

He said organised smuggling was the reason for the huge consumption volume, stressing that the low petrol price of N162/litre was also an incentive for this.

Kyari said, “Today we are paying N162/litre (for petrol). I am sure many people buy AGO (diesel) in the market and it is selling at N280/litre in the market today.So (there is) nowhere in the world diesel sells more expensive than PMS. That means that the price of petrol anywhere in the world, assuming you are going to sell it at the market, you are going to sell it above that price you have seen.”
On what the landing cost of petrol could be as of Tuesday, Kyari said the cost of the commodity at filling stations would be around N256 per litre, with lower price as its landing price.

“Today, from what I can remember, I checked the number two days ago; what would we sell if we are at the filling station today and recover our cost fully is around N256/litre,” he stated.

Kyari said the ongoing meetings between the government and the organised labour on petrol price had not been concluded and could drag beyond next July.

He explained that negotiations on the cost of petrol would have to be concluded to enable the government to effect a change in the cost of the commodity.
On the proposed acquisition of 20 per cent stake in Dangote refinery, Kyari said the corporation was borrowing to buy the stake in the refinery because the refinery business is viable and sustainable.

The NNPC had announced in May that it was in advanced talks with Dangote Industries to acquire a 20 per cent stake in the 650,000 bpd refinery.

Kyari said government money would not be used for the stake acquisition.
He said, “We are borrowing on the back of the cash flow of this business. We know that this business is viable, it will work and it will return dividends.

“It has a cash flow that is sustainable because refinery business, in the short term, will continue to be sustainable. That’s why banks have come forward to lend to us, so we can take equity in this.

“There is no resource-dependent country that will watch a business of this scale, which is bordering on energy security and has implications for fiscal security of the country, and you don’t have a say. And for us, as a strategy, we started this process long before Dangote started his refinery project.”
According to Kyari, the NNPC takes equity in very significant businesses that are anchored on the oil and gas operations: fertiliser, methanol plants, modular refineries and others.

He said the Dangote refinery would start production by 2022, adding that it would deliver over 50 million litres of petrol into the Nigerian markets.

He said, “We are also working on our refineries, to ensure that we fix them. We have awarded the contract for Port Harcourt refinery rehabilitation. And ultimately we are going to close that of Warri and Kaduna very soon in July, so that all of them will work contemporaneously.
The net effect is that you are going to have an environment where Nigeria becomes the hub of petroleum products and supply. It’s going to change the dynamics of petroleum supply globally in the sense that the flow is coming from Europe today and it is going to be reversed to some other direction.”
Kyari said Nigeria would be the supplier for West Africa and many other parts of the world.

He added, “So the meaning of this is, there is an opportunity that has been thrown at us. And I’m not sure Mr Dangote wants to sell his equity in the refinery.

“I can confirm that it was at our instance that we started this engagement. He did not want to sell his shares in this refinery.”



https://punchng.com/petrol-price-should-be-more-than-n280-litre-says-kyari/

Key bits from the article

1.It costs N256 to import one liter of fuel

2.That same liter costs N162 at the pump

3.That means that the subsidy government pays per liter is now N94 per liter.

4.When GEJ raised the cost of fuel from N65 to N97 in 2011/12, the import cost/landing cost was N99 at that time. When Buhari raised fuel from N87 to N145 in 2015/16, the landing cost at the time was N132. These show that the cost of one liter of fuel will keep rising.

5.At the same time, fuel costs N377 in Niger, N377 in Benin, and Togo, N386 in chad, N443 in Ghana, and N470 in Cameroon

Smuggling happens because if I buy subsidsed fuel at N162 in Nigeria, and sell it in Niger at N377, that's a profit of N215 per liter. Add the fact that government in addition to subsidies , pays transporters an 'equalisaiton fund' as well.

So, I can lie I am buying fuel for Nigeria, sell the fuel in Niger, and not only make a profit, but also make more money via the equalization fund.

The rich and the poor both partake of this scam

That is what has been happening for some time, and that is why GEJ was unable to save forex...because the subsidy was draining our reserves. That is also why GEJ wanted to stop it, but Nigerians said no. And the amount of subsidy claims was so high, that we finished paying off subsidy claims from GEJ;s time in 2018 November.


All the above is why subsidy has to go.

If una like make una sell am #1000 per ltr, me and my fellow Buharists go still buy am like that. We no go ever complain even if Buhari kill us or our family today, he can do no wrong.



Sai Baba

BeeBeeOoh:
If una like make una sell am #1000 per ltr, me and my fellow Buharists go still buy am like that. We no dey complain even if Buhari kill us or our family today.



Sai Baba

Well, I am not a sai-baba person, and I did not believe that joke that his supporters told about N40 per liter petrol...seeing what IT DID to Venezuela's oil industry.

But if Buhari wants his supporters and other Nigerians to enjoy cheap fuel...he would do well to remove the subsidy as it exists.

Yes, prices will go above N300 for some time, but...more investment would come in since it would be profitable to refine petrol in Nigeria...meaning that more inactive licenses for refineries will become active. That also means more jobs.

And in a few years, the prices will come down by competition.

We spoilt our refineries in the first place by selling cheap fuel below the price of production for years (Venezuela sells fuel at N8 per liter...and they have no money to repair and restore their broken down oil facilites)

The thing is, if Buhari and his geng had supported GEJ and NOI and SLS to remove subsides in 2012, by now we would have been reaping the benefits.

I understand that eventually fuel price will increase but the government has to put some things in place :

Increase minimum wage to 50,000

Improve electricity

Improve security

They can increase fuel to 300 naira after this

We can't be paying heavily for fuel when people are suffering

Buhari once said he didn't understand what subsidy is.
Looking at it from a different perspective now, he was correct

So the arrest of Nnamdi Kanu cannot make NNPC share fuel for free to zombies?

Zombies how far?

Wetin be una gain for inside this arrest now?

Abi it’s just a piece for masturbation alone

This was was that was envisaged in the time past but wicked souls in this present government opposed it. Nigeria would have long been better for it by now but the stupid scammer in power now then called it a fraud.

NNPC was suggested to be scrapped they were shouting themselves hoarse but today the same body is the most putrid cesspool of unimaginable corruption by successive governments.

Shut up there.

The subsidy money you people have been collecting from FG, how many littlers of the petrol do you people sell to Nigerians.

Subsidy is a big scam but this government can't stop paying it cos they are also a scam for campaigning against it then

Monogamy:
Shut up there.The subsidy money you people have been collecting from FG, how many littlers of the petrol do you people sell to Nigerians.

Subsidy is a big scam but this government can't stop paying it cos they are also a scam for campaigning against it then

From your mouth Helinues? No 30k stipends for this month for you o.....

A country filled with comedians at the helm of affairs.

Despite prolonged closure of the borders, smugglers are to be blamed for high consumption while the suffering masses are to bear the brunt of government failures and inefficiencies.

An unfortunate country with dubious leaders !

Make the Price whatever but stop Subsidy.

Buying a 20% stake at private refinery.. while you keep on spending billions maintaining monuments called refinery....as if building a new one is rocket science.
These kindergarten excuses can't take us anywhere until fuel is sold above 3digits a liter

Our oyel according to some people