Chief Executive Officer of the Nigerian National Petroleum Company Limited, NNPCL, Mele Kyari, has defended the petroleum subsidy removal by President Bola Tinubu.
Mr Kyari while briefing journalists in Abuja on Monday, said under the subsidy regime, petrol smugglers took advantage of the loopholes and made around ₦lN17m per truck in neighbouring countries.
According to him, cross-border smuggling was rampant due to the fuel subsidy, noting that 6,000-liter truck smugglers made no less than N17 million per trip.
“In the last 47 years, PMS has always been subsidised and subsidy is creating arbitrage that means there is a difference between price in one location, lower than what it should be in another location,” he said.
“And when Mr. President announced the removal of subsidy in June, what he did was recalibrate the price.
“There is no longer any value in anyone taking the product across the border. If you do, you’re not going to make those profits than you do.
“In a 6,000-litre truck, you can actually gain up to N17 million from just one truck. How are you going to stop someone who with two trips can just easily make N17 million times two—which is the price of the truck itself.
“However, when you take a truck legally maybe N8 million, say, to Maiduguri, the legitimate value you have is less than N500,000.
“Why will I see N17 million and then take all the trouble go to Maiduguri, keep it in the fuel station for one month and then make N3 to N4 million,” Mr Kyari said.
