By Nneka Nwogwugwu
The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, has explained ways smuggling activities have affected pump price.
According to a statement by the corporation in Abuja on Thursday, Kyari gave the explanation in a presentation at an interactive session by the Joint Senate Committee on the 2022-2024 Medium Term Expenditure Framework, MTEF, and Fiscal Strategy Paper, FSP.
He noted that concerted efforts by the Corporation and some federal agencies to combat the menace of smuggling of petroleum products have been largely hampered by existing arbitrage fueled by the prevailing huge price differentials in pump price of petrol in Nigeria and neighbouring countries.
According to Vanguard, the NNPC boss said that a price difference of over N100 per litre between what is sold in Nigeria and in countries around the nation, it was difficult to cage the activities of petrol smugglers.
Kyari emphasized that the activities of smugglers have also made it difficult for the country to determine the actual consumption figures for petrol, noting that the Corporation can only know what was trucked out from loading depots across the country but cannot determine how much of that was consumed in-country.
He reiterated a base oil price scenario of $57 per barrel for 2022, $61 per barrel for 2023 and $62 per barrel for 2024 predicated on a base national production of 1.883 million barrels per day in 2022, 2.234 million barrels per day in 2023 and 2.218 million barrels per day in 2024.
Kyari explained that the assumptions were arrived at after consultations with the Ministry of Finance and other relevant stakeholders while also undertaking a careful appraisal of the three-year historical dated Brent Oil Price average of $59.07 per barrel premised on Platts Spot Prices among other considerations.
