There are indications that the Nigerian National Petroleum Corporation (NNPC) is incurring losses of about N350 million daily as oil marketers have shunned the importation of petrol due to dwindling margins.
ThisDay is reporting that the apex oil firm is incurring the losses of between N8 and N10 per litre through the allocation of the product to marketers at a coastal price of N126.63 per litre – translating to a loss of N350 million daily at the current estimated daily domestic consumption of 35 million litres of petrol.
It is also understood that for both NNPC and the marketers to import petrol and sell at the official price without incurring losses, the appropriate pump price should be N155 per litre.
Speaking to the newspaper during the weekend, NNPC spokesman, Mr. Ndu Ughamadu, said that the corporation has not said it was subsidising petrol.
He further stressed that even though the corporation also plays the role of a social supplier of products in periods of national challenges, there was no room for corruption under the present management.
Ughamadu said to end the persistent fuel crisis that reared its head each time marketers stopped importation in the past, the Group Managing Director of the corporation, Dr. Maikanti Baru, has reactivated some of the 21 NNPC depots across the country to ensure that products are pumped into the facilities via pipelines.
When the current retail price band of N135-N145 per litre took effect in May 2016, the Petroleum Products Pricing Regulatory Agency (PPPRA) had fixed the indicative ex-depot price at between N123.28 and N133.28 per litre for petrol.
However, for petrol that is still in the mother vessel on the high sea, the ex-depot price or coastal price was fixed at N116.63 –N126.63 per litre, as marketers incurred additional expenses to hire daughter vessels to move the product to the depots.
It was gathered that at the international market price of $510 per metric tonne for petrol as of Friday, the corporation was absorbing N10 per litre by allocating the product to the marketers at the coastal price of N126.63.
On concerns being raised that the losses being absorbed by the corporation could fuel allegations of corruption in the future, Ughamadu said there was no room for corruption under the present NNPC management.
“The corporation, in addition to its numerous responsibilities, also plays the role of a social supplier of products in periods of national challenges to keep the nation wet. It is a priority.
“The present NNPC management is very prudent, effective and efficient in managing resources. Therefore, no room for corruption,” he said.
He said NNPC’s management, with the support of the federal government, had contained pipeline vandalism and brought many of the 21 depots back to operation, thus averting the fuel crisis that occurred each time marketers stopped importation.
“In the immediate past, we had more use of private tank farms for the throughput because many of our depots were down due to massive pipeline vandalism. We could not pump to depots.
“Today, NNPC management under Dr. Maikanti Baru, with the support of the federal government, has contained vandalism with many of the depots – Atlas Cove, Mosimi, Kano and others – now functional,” he added.