Kyari stated this on Wednesday at the Legislative Transparency and Accountability Summit organised by the House of Representatives Committee on Anti-Corruption in Abuja.
His declaration was coming barely two months after he told the resumed hearing of the ad hoc committee of the House of Representatives investigating subsidy regime from 2013 to date, chaired by Ibrahim Mustapha, that the landing cost of petrol stands at N327.68 per liter.
But in less than two months, the cost ballooned to N510 per liter.
“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 liter 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 a 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 liter of PMS to the pumps at the N445 (to a dollar) exchange rate. It is not possible.
“In some places, you are subsidizing up to N290 on every liter. With this regime, it is impossible for you to avoid all the wrong things that are happening – round-tripping, cross-border smuggling, and 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,s and royalties.”
Kyari at the September hearing further said; “We have about 1.6 billion liters incoming, land and marine. This is what is the minimum level we have to maintain, especially as we approach winter.
‘’Most of the refineries we procured are actually shutting down their operations because of the clamour for green energy and COP26 compliance.
“Even gas that is transition fuel for us is being given 8 years. Of course, we do not agree. When you look at PMS outlook, we want to be closing each and every month with a two billion closing stock. ‘’That is the only way you can sustain petroleum so that the marketers do not see some slack and take advantage by beginning to hoard products that can create artificial scarcity which can lead to queues.
“There is a huge arbitrage for anybody to move product to outside. We are not saying that the bulk of the product is smuggled. The reality is that there is no study to validate the actual consumption. What we are reporting daily is what the authority, which is the regulator publishes. They are represented at every depot in Nigeria.
“Exchange rate has been moving steadily from N195.5 per dollar to now N390.6 to a dollar, on average. The subsidy scheme is two ways, the FX subsidy, and price. “The shipping cost has doubled. Therefore, the landing cost of PMS has moved from N87 per liter in 2015 to about N327.68 per liter today. When you compare it to what we sell, you have N209 on every liter.
