Amidst a heated debate on the removal of subsidy, the Nigerian National Petroleum Company Limited (NNPC) and fuel marketers, including the Independent Petroleum Marketers Association of Nigeria, find themselves at odds. The information and interviews for this report were conducted by Punch Newspaper.
The disagreement coincides with the depreciation of the naira against the United States dollar, with economists and oil marketers asserting that the subsidy on petrol is on the rise.
As the naira closed at 998/dollar at the official market and 1,225/dollar at the black market on Tuesday, concerns mount over the increasing subsidy on Premium Motor Spirit (PMS). Experts, as reported by Punch Newspaper, project that in a free market, petrol prices could surge to N1,200/litre, citing the crash of the naira against the US dollar and the cost of crude oil.
The NNPC contends that it is recovering its full importation cost for petrol, countering claims of rising subsidies. Bismarck Rewane, CEO of the Financial Derivatives Company, as reported by Punch Newspaper, explains that while the subsidy was not entirely removed, it was significantly reduced. Despite these assertions, oil marketers argue that subsidy on petrol is on the upswing, emphasizing the economic challenges posed by the depreciating naira.
Petrol, currently solely imported by NNPC, sells for N617/litre to N660/litre in Nigeria, depending on the location of purchase. The clash between NNPC and marketers, as reported by Punch Newspaper, adds complexity to the ongoing subsidy debate, with stakeholders urging a balanced approach that considers economic, social, and political implications.
The World Bank’s previous insistence that without subsidy, the cost of PMS should not be less than N750/litre adds to the complexities of the situation. As the debate rages on, the uncertainty surrounding fuel prices deepens, with the naira closing at N988.46/$ on the first day of official trading on the Investors and Exporters Window. The headline reflects the growing tension and uncertainty surrounding the future cost of petrol in Nigeria, with credit to Punch Newspaper for their comprehensive reporting and interviews.
