November 24, (THEWILL) – The Nigerian National Petroleum Company (NNPC) has hinted that a litre of fuel may sell between N320 and N340 in 2022.
This is just as the federal government is contemplating the replacement of fuel subsidy with a monthly N5,000 fuel grant to the nation’s most vulnerable citizens.
Group Managing Director, NNPC, Malam Mele Kyari, revealed this at the launch of the World Bank Nigeria Development Update (NDU) November 2021 edition, entitled, ‘Time for Business Unusual’, in Abuja on Tuesday.
According to Kyari, the new Petroleum Industry Act (PIA) provides that by the end of February 2022, Nigeria should be out of the subsidy regime.
“There will be no provision for it legally in our system, but I am also sure you will appreciate that government has a bigger social responsibility to cater for the ordinary and therefore engage in a process that will ensure that we exit in the most subtle and easy manner,” he said.
Kyari gave assurances that fuel subsidy removal would “definitely” be achieved in 2022 as it is now fully backed by law, and that the price of the product may range between N320 and N340 per litre.
At the moment, petrol (PMS) in Nigeria sells for N165.
On the hike in prices of cooking gas, he said that it is a demand and supply issue as there is a global crunch on gas supply and many countries are now threatened by a lack of supply in December.
He added that the product was not under any subsidy regime and therefore irrespective of where it is produced, would follow global trends.
Kyari, however, said the company is working on increasing local production to meet the needs of consumers.
Also speaking at the event, Minister of Finance, Budget and National Planning, Zainab Ahmed said in the place of fuel subsidy removal, the federal government would pay a monthly N5,000 transport grant to poor Nigerians.
This, she said, would target about 30 to 40 million Nigerians who make up the poorest population of the country.
The government has consistently argued in favour of fuel subsidy removal, contending that the proceeds would be used to fund critical infrastructure, a position canvassed by the International Monetary Fund (IMF).
The minister said: “The subsidies regime in the (oil) sector remains unsustainable and economically disingenuous.
“Ahead of the target date of mid-2022 for the complete elimination of fuel subsidies, we are working with our partners on measures to cushion potential negative impact of the removal of the subsidies on the most vulnerable at the bottom 40% of the population.
“One of such measures would be to institute a monthly transport subsidy in the form of cash transfer of N5, 000 to between 30 – 40 million deserving Nigerians.
“We are very optimistic that the recent developments in the oil sector, such as the Petroleum Industry Act (PIA) 2021, hopefully, the full reactivation of the 4 public refineries in the country, and the completion and coming on stream of the 3 private refineries under construction in 2022, would significantly boost contribution from the sector to our economic growth efforts.
“I agree with the report that with the expansion of social protection policies during the pandemic, the government has an opportunity to phase out subsidies such as the PMS subsidy while utilising cash transfers to safeguard the welfare of poor and middle-class households.”
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