Lagos, June, 2023 – Mele Kyari, the Group Managing Director of the Nigerian National Petroleum Company Limited, says the removal of petrol subsidy will benefit the masses on the long run.
Kyari made the observation while speaking on a Channels Television on Thursday night.
He said this would be so because only between 10 to 15 percent of Nigerians actually benefitted from petrol subsidy regime.
Kyari said an average Nigeria did not own private cars, but relied on the mass transportation system.
“But there are Nigerians who own three to four cars as well as escort vehicles which consume more fuel than ordinary Nigerians,” he said.
He also said the subsidy removal would also check abuses and corruption along the petrol supply chain.
Kyari said only few petrol stations were selling at the old regulated price of N184 per litre, especially outside Lagos.
“There was nowhere you would find stations selling at regulated prices except for NNPC and a few others and many of the cars on the road are owned by people that are not using these cars for the purpose of transporting the mass of people.
“They are also not using it to transport people to their workplaces.
“The owners are mostly business leaders, people who have resources and ability. Then you have a marginal group of people, those who drive their cars to work.
“This is very reflective in the consumption of fuel. They are maybe 10 to 15 percent of the population taking the value of 100 percent, that is what we are dealing with.
“The effect only comes to the ordinary man because some of the transport means for the ordinary people are Keke Napeps and some of the small cars we are seeing around. These cars consume the least amount of fuel.”
He said the increase in petrol pump prices would also drastically reduce arbitraging which the market environment had created.
“Before this decision we took, fuel was selling for N195 per litre in Abuja, but just across the border, there is nowhere you have prices that are less than N500 per litre.”
He said Nigerian fuel was being sold in neighbouring countries as far as Sudan.
Kyari said if 60,000 liters of petrol were taken from Lagos to Maiduguri legitimately, the margin for the trader is about N300,000 to service the fuel station and pay workers.
“It also means the trader is making about N1 million from the sale of four trucks of that capacity, meanwhile, buying the fuel could cost up to N8 million.
“But if this same product is taken across the Nigerian border, the marketer makes N12 million to N17 million.
“So, the new pump price will reduce fuel smuggling because Nigerian fuel now sells at the market price. (GBN)
