WHY INCREASE IN PETROL PRICE IS INEVITABLE - PRESIDENCY

Why increase in petrol price is inevitable - Presidency

The presidency has reacted to the decision of the the Nigerian National Petroleum Company Limited (NNPCL) to increase the price of petrol as the company announced on Tuesday.

The NNPCL had on Tuesday increased the price of petrol to N855 per litre.

In a post on his X handle on Wednesday, Bayo Onanuga, the special adviser on media and strategy to President Bola Ahmed Tinubu said NNPC took the decision as the company can no longer shoulder the difference between the amount the product is being imported into Nigeria and how much it is being sold at the pumps.

According to Onanuga, NNPC may go bankrupt if continues to pay the difference between the landing cost of petrol in Nigeria and the price the product is being sold at the pumps.

He said the indebtedness of the company to petrol marketers as recently acknowledged by the management of the NNPCL resulted from shouldering the rising cost of petrol to protect Nigerian consumers.

He also dismissed claims that the Tinubu’s administration has been deceiving the Federal Government over the payment of subsidy for petroleum products.

“NNPC cried out recently because it can no longer sustain the price differential on its balance sheet without becoming insolvent,” he said.

“The situation has greater implications for the ability of the three tiers of government to function as the NNPC has failed to pay into the Federation Account, the money that should go to the government.

“There are no easy choices. Something must be done to make NNPC survive, and keep the engines of government running and petrol flowing at the pumps.

“That is the scenario that is unfolding, and the game changer and big relief giver may well be the Dangote refinery and other local refineries, which will become the fuel suppliers to the local market.

“When Dangote Refinery and other refineries, including government-owned Port Harcourt Refinery, come fully on stream, our country and economy will benefit on all fronts. There will be many good paying jobs that will be created along the value chain.”

He noted that with the coming of stream of the Dangote Refinery, there will also be a drop in the huge demand for foreign exchange to import petroleum products.