January 10, 2023
The Nigerian National Petroleum Company Limited is selling Premium Motor Spirit, popularly called petrol, at a loss because of its mandate from the Federal Government as regards PMS subsidy, the Minister of State for Petroleum Resources, Chief Timipre Sylva, said on Monday.
Sylva’s remarks came as oil marketers stated that the supply hitches in the downstream oil sector that often leads to fuel scarcity, might persist till June, based on the government’s plan to end petrol subsidy in that month.
The petroleum minister spoke in Abuja at the resumption of the scorecard series (2015-2023) of the President, Major General Muhammadu Buhari (retd.).
Last week, the Minister of Finance, Budget and National Planning, Zainab Ahmed, said the Federal Government had budgeted about N3.6tn for fuel subsidy till June 2023.
Sylva, while speaking in Abuja on Monday, insisted that subsidy had been a burden, but stressed that it was a mandate on NNPC which had made the oil firm to continue selling PMS at a loss.
He said, “The management of the supply situation under this subsidy regime is not easy. We must all agree that so much money is being burnt in our cars, but somehow we have to put funds to continue to keep the country wet.
“Sometimes if you really think deeply you begin to wonder what magic we are doing to be able to keep this country wet consistently. Considering that you buy something, let’s say for N10, and you are to sell it at a loss.
“And then you are expected to go back to buy the same thing, and come back again to sell it at a loss. So at every point in time you are looking for more money to continue to buy it, because you’re mandated to sell it at a loss.”
Sylva added, “So if you are a businessman, look at it from this perspective, that you are now in the business where you are mandated to sell at a loss to the public. That is not an easy job, I must tell you.”
Respond in to a question on how he would feel when buying petrol at N300/litre, Sylva said he would not feel bad about it.
“If you ask me how I will feel as a private citizen to buy petrol at N300/litre, sadly, I will say I won’t feel bad, knowing the actual situation. And if you compare Nigeria to other countries, you will understand,” he stated.
On the rehabilitation of the Port Harcourt Refinery, the minister said the target date for the commencement of operations of the plant had been shifted to the first quarter of this year.
He said, “I announced last year, and from the very beginning, we have been saying the same thing, we didn’t say that we are going to complete the rehabilitation of the two refineries in Port Harcourt by May this year.
“Our promise has been that the 60,000 barrels per day refinery, within Port Harcourt refinery, will be rehabilitated by end of the fourth quarter of 2022.”
Sylva then asked Kyari to speak on how far the NNPC had gone with the rehabilitation of the Port Harcourt refinery.
Responding, Kyari said, “The total rehabilitation of the refinery will take 42 months from the date of award of the contract. Typical of every refinery, we do the rehabilitation in phases.
“And our promise is to start up the fuel plant, which is 60,000 barrels per day component of this activity by the last quarter of 2022, but this is not practical. But we will start it up in the first quarter of 2023. Otherwise, every other process is going on.”
Reacting to the remarks of the NNPC boss, Sylva said, “In other words, what he is saying is that the rehabilitation of the 60,000 barrels per day refinery has been completed and is going to be started in first quarter of 2023 as promised.”