The Group Managing Director, Nigerian National Petroleum Company Limited (formerly Nigerian National Petroleum Corporation), Mele Kyari, has disclosed that NNPC cannot maintain a pump price of N170 per litre for Premium Motor Spirit, popularly called petrol or fuel.

Kyari, while speaking at the Legislative Transparency and Accountability summit organised by the House of Representatives Committee on Anti-Corruption In Abuja on wednesday, stated that the landing cost of fuel was thrice the amount.

Kyari states “it is not possible for you to buy fuel at N170 when your actual cost is thrice that value.

“For instance, today, when PMS comes into this country, we transfer to marketers at N113 per litre for us to ensure N165 at the pump.

“So, you must sell at N113 to them to be able to deliver at N165, that means whatever the cost, anything after that value; that is subsidy. Somebody has to pay for it.

“Everyone knows the price of PMS around the world. There is nowhere today that you can land a litre of PMS to the pumps at the N445 (to a dollar) exchange rate. It is not possible.

“In some places, you are subsidising up to N290 on every litre. With this regime, it is impossible for you to avoid all the wrong things that are happening – round tripping, cross-border smuggling, document forgery.

“Anywhere you have arbitrage, you will have these issues. As long as arbitrage is there, you will continue to have these issues and you cannot hold NNPC accountable for it because it is a value chain that involves everything and everybody.

“You cannot price it at the market today because of the socio-economic impact on the prices of PMS. Every country is doing something about high energy costs. Some have removed taxes on petroleum; this is a subsidy. NNPC Limited will no longer go to FAAC because we are expected to pay taxes, dividend and royalty.”

The GMD also stated that he has been receiving death threats over the reforms he was spearheading in the oil and gas industry.

Kyari further stated that he was not deterred by the threats.

He said, “Without mincing words, I want to say that this industry is at a threshold of change.

“There is massive change going on and it is very expensive and of personal cost to many people, including myself. There is a threat to life; I can say this.

“I have several death threats but we are not bothered about this. We believe that no one dies unless it is his time.

“But this is the cost of change. When people move away from what they are used to, to something that is new; that will take away value and benefit from them, they will react.

“That reaction is of benefit to all of us and we will work together to make sure it works out.”