Mr Kyari noted that global market conditions have pushed the landing cost to about three times the value of the current pump price.
The Nigerian National Petroleum Company (NNPC) Limited on Wednesday said it could no longer sustain petrol pump prices at N170 per litre.
The NNPCL chief executive officer, Mele Kyari, disclosed this while delivering a keynote address at the legislative transparency and accountability summit organised by the House of Representatives committee on anti-corruption on Wednesday.
The response came as Nigerians began to feel the impact of fuel scarcity across the country.
Amidst the scarcity, fuel marketers increased the pump price of petrol across states, with several stations selling the product above the government-regulated price of N165 per litre.
Speaking on Wednesday, Mr Kyari said selling petrol at N170 was no longer sustainable.
He noted that market conditions have pushed the landing cost to about three times the value of the current pump price.
“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,” Mr Kyari was quoted by TheCable as saying.
“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.
“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. In some places, you are subsidising up to N290 on every litre.”
READ ALSO: New Fuel Price: PDP tackles Buhari
With this regime, Mr Kyari said it is impossible for you to avoid all the wrong things that are happening such as round-tripping, cross-border smuggling and document forgery.
He said: “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. NNPC Limited will no longer go to FAAC because we are expected to pay taxes, dividends and royalty.”
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