Nigeria’s era of subsidy on petrol is gone for life, the Group Managing Director, Nigerian National Petroleum Corporation, Mele Kyari, revealed on Monday.
Kyari, who spoke during a live programme on African Independent Television, stated that with the current fluctuations in global crude oil prices, the cost of refined products would be determined by market forces going forward.
“As at today, subsidy/underrecovery is zero,” he said.
“Going forward, there’ll be no resort to either subsidy or under recovery of any nature. NNPC will just be another player in the market space.But we’ll be there for the country to sustain security of supply at the cost of the market.”
Under recovery is the cost incurred by the NNPC on behalf of the federal government to keep the pump price of petrol at the previous benchmark price of N145 per litre.
However, a drop in the price of crude oil eliminated the under recovery and the landing cost of petrol fell below the benchmark price.
In response to market forces, the federal government approved a reduction in the pump price of petrol from N145 to 125 per litre.
It also mandated the Department of Petroleum Resources (DPR) to adjust retail price of petrol monthly in response to market dynamics.
In line with the directive, the DPR announced that the pump price of petrol would be adjusted to N123.50 per litre for retail in April.