Petrol subsidy nears N1trn monthly, bigger than when Tinubu came–Report
Maureen Aguta
Nigeria’s petrol subsidy has returned and is now bigger than the amount being paid before President Bola Tinubu stopped the costly practice last May.
BusinessDay’s analysis has revealed that the country is paying about N907.5 billion subsidy on premium motor spirit (PMS) popularly known as petrol monthly as the country’s foreign exchange crisis pushed the actual cost of litre of fuel to N1,203.
One week before the 2023 presidential election which brought in the new administration, Mele Kyari, the Group CEO of the Nigerian National Petroleum Company (NNPC) Limited, said at the final cutover ceremony of NNPC and the birth of NNPCL at the corporation’s towers in Abuja, that the country is spending over N400 billion monthly on petrol subsidy.
Recent investigations into Nigeria’s petrol pricing dynamics have revealed a significant surge in the landing cost of petrol, attributed to the escalating black-market exchange rate.
According to findings, at the prevailing black-market rate of N1, 500 per dollar, the landing cost of petrol has soared to N1,009 per litre, marking a substantial increase from N720 per litre recorded in October 2023.
Till date, the state-owned oil company remains the sole importer of petrol into Nigeria, despite the passing of the Petroleum Industry Act 2021 and the deregulation of the downstream sector, which allows for other private oil marketers who are licensed to import the product into the country.
However, accessing forex required for the importation of the commodity has proved difficult, leading to them depending on the state-owned oil company.
More than 90 licensed marketers, tasked with importing petroleum products into Nigeria, find themselves hamstrung by an unresolved price differential, rendering them unable to bring in any products nearly nine months after President Bola Tinubu announced the deregulation of the downstream segment of the petroleum industry.
Jide Pratt, country manager of TradeGrid, said that marketers need access to forex to import the refined product into the country to change this development.