The Nigerian National Petroleum Company Limited and fuel marketers under the aegis of the Independent Petroleum Marketers Association of Nigeria, on Tuesday, clashed again over the removal of subsidy on petrol.
This came against the backdrop of the depreciation of the naira against the United States dollar at both the official Investors & Exporters Window and the parallel market.
On Tuesday, the local currency closed at 998/dollar at the official market, while it traded at 1,225/dollar at the black market.
On the back of the falling naira rate, economists and oil marketers said PMS subsidy was increasing in recent times, but the NNPC quickly countered these positions and declared that it was recovering its full cost on the importation of Premium Motor Spirit, popularly called petrol, countering the positions
The Chief Executive Officer, Financial Derivatives Company, Bismarck Rewane, had during a live television programme on ChannelsTV on Sunday, explained that fuel subsidy was not removed but reduced.
Similarly, oil marketers told our correspondent on Tuesday that subsidy on petrol was increasing considering the crash of the naira against the United States dollar and the cost of crude oil, stressing that PMS should sell for N1,200/litre in a free market.
Petrol, which is solely imported into Nigeria by the NNPCL, currently sells for between N617/litre to N660/litre, depending on the location of purchase in Nigeria.
Also speaking on the matter, the Chief Executive Officer, Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said there was partial subsidy on petrol, but noted that the commodity was subsidised by the government for political, social and economic reasons.
Full cost recovery
But when contacted, the Chief Corporate Communications Officer, NNPCL, Olufemi Soneye, described the positions of economists and marketers as assumptions, and insisted that the Federal Government had stopped subsidy on petrol.
President Bola Tinubu had during his inaugural speech on May 29, 2023, declared that subsidy on petrol was gone, a declaration that was effectively implemented the next day by NNPCL.
Before Tinubu’s declaration, the pump price of petrol was below N190/litre, but it jumped to over N500/litre after the President’s statement, and moved up again to over N600/litre a few weeks later.
Asked to state if the NNPCL, being Nigeria’s sole importer of petrol, subsidising the commodity as posited by dealers and experts, the oil firm’s CCCO replied, “We prioritise our time on substantive matters rather than responding to assumptions.
“At NNPC Ltd, we prioritise national development through energy security and sustainable growth. We reiterate that the Nigerian government does not pay subsidy on fuel; we recover full costs from our imported products.
“As a global energy company, our focus remains on fostering a vibrant and energy-secure Nigeria.”
The National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Ukadike Chinedu, stated that subsidy on petrol was rising and that the cost of the commodity should be around N1,200/litre in a free market.
“To be pragmatic in this analysis let’s consider the cost of petrol today in the United States. For premium petrol, it is $2.99, while super petrol sells for $3.15 or $3.10 depending on the part of that country where you are making the purchase.
“Now, $3 in Nigeria is over N3,000, because a dollar in the parallel market is over N1,000. You can also see the cost of diesel, that is over N1,000/litre, and it is important to state that petrol is usually higher in price than diesel in a free market.
“So if you consider the cost of diesel, dollar and other international factors, the price of petrol in Nigeria should be around N1,200/litre, but the government is subsidising it, which to an extent is understandable,” he stated.
Ukadike noted that he had earlier explained that the government was implementing quasi-subsidy, and by this it means that “the Federal Government, instead of taking out the subsidy by 100 per cent, decides to take out about 50 per cent.”
The IPMAN official, however, expressed optimism again that the cost of refined petroleum products would reduce as soon as the Port Harcourt and Dangote refineries start producing the commodities.
The World Bank had stated in December that subsidy on petrol was still being implemented by the Federal Government, as it insisted that the cost of PMS should not be less than N750/litre if there was no subsidy.
Naira at N988/$
The naira closed at N988.46/$ on the first day of official trading on the Investors and Exporters Window on Tuesday
Meanwhile, the Nigerian National Petroleum Company Limited, on Tuesday, said a total of 112 cases of crude oil theft were recorded in the Niger Delta in one week.
It said the oil theft incidents occurred between December 23, 2023 and December 29, 2023, adding that in the past week, 42 illegal refineries were discovered in several locations in the oil rich region.
It outlined the locations to include Konsho and Tebidaba in Bayelsa State; Obokofia in Imo State; as well as Ogidigben, Mereje and Obodo Omadina, in Delta state
The oil firm disclosed this in a documentary posted on its official X handle, adding that the “illegal refineries in Umuire, Abia State, and Upata in Rivers State, were also discovered and destroyed.”
It further stated that 14 illegal connections were uncovered in several parts of the Niger Delta, as a tunnel covering an illegal connection was also uncovered in Owaza, Abia State, while 10 cases of vandalism were discovered
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