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 of

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.”

‘Subsidy reduced’

Rewane had earlier explained that subsidy on petrol was reduced and not removed, while featuring on a live television programme on Sunday evening, as he further highlighted the effects of the reduction in fuel subsidy and how it was affecting salary earners in Nigeria.

He said, “At the inauguration, it was said that (fuel) subsidy was gone but subsidy was actually reduced.”

Buttressing his position, he explained, “There is the convergence of exchange rates and reducing the windows into one. The consequence of that is that money has been transferred from consumers to the government.

“Subsidies are reversed taxes; if you reduce them, you increase the people’s taxes and reduce their income. What has happened is that government revenue has increased by 44 per cent between May and June (2023). Money has been transferred to the government but what is the government doing with it?

“The consumers, on the other hand, had a minimum wage, which in dollar terms was $40 in 2002. In 2019, it was about $70, but it has now been reduced to $24.”

Marketers project N1,200/litre

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.

“I also believe that there will be a reduction in the prices of petroleum products this year when you consider what the government is currently doing. The coming onboard of the Port Harcourt refinery and the supply of crude to Dangote refinery are good developments in the sector.

“Their operations will help stabilise the price of PMS and other petroleum products in Nigeria, because it will definitely cut down the importation of products,” Ukadike stated.

Social, economic reasons

The Centre for the Promotion of Private Enterprise CEO said subsidy was being retained partially because of its economic, social and political implications.

Yusuf said, “To protect the citizens from further hardship is the reason why the government seems to have applied the brakes on subsidy removal. We are all witnesses to the pain and hardship that citizens are going through.

“So when you are adopting some of these policies, especially these liberal economic policies, it comes to a point where you have to moderate your position for social reasons.

“Just as the World Bank said, if we want to leave the price fully to market forces and the liberal economic policies, the fuel price will be above N800/litre. Can any government that is sensitive to the feelings of its citizens allow that to happen?

“Even if economically that is the way to go, there must always be a human face to economics. So what the government has done is to moderate the reform, and that is why I think the government has insisted that the NNPC should still hold the price at the current level.”

Yusuf noted that the government must balance the gains and side effects of subsidy, stressing that economic hardship may worsen should subsidy be removed 100 per cent.

“All of us who were saying that they should remove the subsidy, we can see that they have partially removed it now, but look at the consequences. Economically it will sound good, but socially and politically it is very costly.

“So those in government need to balance all those considerations. They need to balance economic, political and social considerations. That is why we find ourselves in a situation where we have partial subsidies, both in petrol and electricity,” he stated.

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.

This is an 8.97 per cent decline from the N907.11/$ it closed trading on Friday (the last day of official trading for 2023) according to data from the FMDQ Securities Exchange. This continues a worrying trend for the naira which was one of the worst performing currencies of 2023.

According to Bloomberg, the naira had one of its worst years in 2023, a title that 2024 might usurp. It noted that the national currency lost about 55 per cent of its value as of Thursday 28, 2023.

Based on Kyle Chapman, FX markets analyst at London-based Ballinger & Co, the naira was the third worst-performing global currency in 2023 due to a backlog of unsettled forwards, undelivered promises of dollar inflows, and a two-decade peak in inflation.

Chapman said, “The naira’s downward momentum is likely to continue through much of 2024, and its ultimate trajectory will depend on whether the CBN’s rhetoric transforms into concrete policy moves that drive up the flow of US dollars into Nigeria and shore up trust in the official market.

“If the CBN’s promised measures materialise and Tinubu’s government enacts structural changes to increase oil production or to drive foreign investment, there is plenty of opportunity for the naira to lift from its record lows. But a quick fix is unlikely, and further depreciation will come to counteract supply and demand imbalances.”

In its December Nigeria Development Update, the World Bank noted that naira had depreciated against the US dollar by 41 per cent in the official market and by 30 per cent in the parallel market. It noted that the naira needs increased volume to stabilise in the official market.

It said, “Further monetary policy tightening is expected to help underpin the value of the naira. However, there is also a need to increase FX supply in the market. Facilitating FX flows, especially from all exports, through the NAFEM can help provide additional volumes in the official window that can help provide stability.

“In addition, clarity on the CBN’s net reserve position, and on the CBN’s continued progress in clearing the FX backlog, would also strengthen market confidence.”...

https://punchng.com/nnpcl-marketers-clash-over-subsidy-operators-peg-petrol-at-n1200-litre/

Eleribu ronus wia una dey oooo laslas we go buy it @2k per litre.
This is one of the greatest news on your mandate sir.

What was said in this article is something some of us have always known
The price of Diesel as at December 2023 is over 1,000 while Kerosene and Aviation Fuel are between 700 to 1000+. No one needs to tell you that Petrol is being subsidized,forget whatever comes out from NNPCL
I have always said on some threads that Government needs to find a way to subsidize Diesel, Nigeria is perhaps the only economy in the world that is powered by Generators,it is very funny that this Government is still dilly dialing on what to do with our Electricity challenges
Funny Enough,the article has talked about the solution to reducing prices,once both the Dangote Refinery and Port Harcourt Refinery start operations,it is going to be game over for all this subsidy madness
I seriously encourage this Government to look at the possibility of fully privatising at least two of our Refineries
I don't understand why we need to have four Refineries,sell off two of those scrap metals to people who can run them
As for our Electricity woes,I still believe that Government should stop this National Grid Madness
Let states and Corporate Organizations start producing and distributing power to their citizens.Nothing stops this country from having 36 or more power distribution and generation companies
Who says a company can't generate electricity and sell to just a few customers,this idea that all Power generated must be fed to the National Grid must be critically assessed
Kindly check my signature to get good properties with good titles around the Ibeju Lekki Industrial Hub in Lagos State

There is fire on the mountain

Chai

1200 per litre ontop 30k minimum wage

Kenochi:
What was said in this article is something some of us have always known
The price of Diesel as at December 2023 is over 1,000 while Kerosene and Aviation Fuel are between 700 to 1000+. No one needs to tell you that Petrol is being subsidized,forget whatever comes out from NNPCL
I have always said on some threads that Government needs to find a way to subsidize Diesel, Nigeria is perhaps the only economy in the world that is powered by Generators,it is very funny that this Government is still dilly dialing on what to do with our Electricity challenges
Funny Enough,the article has talked about the solution to reducing prices,once both the Dangote Refinery and Port Harcourt Refinery start operations,it is going to be game over for all this subsidy madness
I seriously encourage this Government to look at the possibility of fully privatising at least two of our Refineries
I don't understand why we need to have four Refineries,sell off two of those scrap metals to people who can run them
As for our Electricity woes,I still believe that Government should stop this National Grid Madness
Let states and Corporate Organizations start producing and distributing power to their citizens.Nothing stops this country from having 36 or more power distribution and generation companies
Who says a company can't generate electricity and sell to just a few customers,this idea that all Power generated must be fed to the National Grid must be critically assessed
Kindly check my signature to get good properties with good titles around the Ibeju Lekki Industrial Hub in Lagos State

How would the port Harcourt and dangote refinery lead to reduced price abeg

Fuel for N1,200/litre

Agbadorians and Bulabans, are we still standing on this mandate

“All of us who were saying that they should remove the subsidy, we can see that they have partially removed it now, but look at the consequences. Economically it will sound good, but socially and politically it is very costly.

cc nairalanda1
Your Ogas say you should rest as the consequences of your beloved policies nor follow

Better adopt ogogoro-driven engine or even vegetable oil driven engine before they overtake the dollar rate.

NAME ONE THING APC CANNOT DESTROY?

Kukutenla:

cc nairalanda1
Your Ogas say you should rest as the consequences of your beloved policies nor follow

the moment petrol subsidy was heavily suppressed and govt had little breathing space, electricity subsidy started skyrocketing in a bid for corruption to use up what was being saved. Nigeria is a wonderful country.

TOO MUCH LYING. GOVERNMENT MUST FORCE PETROL DOWN TO N500 PER LITER AND NAIRA TO N500:$1.

mrvitalis:

How would the port Harcourt and dangote refinery lead to reduced price abeg

Excerpt from the post your replying to and accusing of demanding lower prices from refineries:

once both the Dangote Refinery and Port Harcourt Refinery start operations,it is going to be game over for all this subsidy madness
I seriously encourage this Government to look at the possibility of fully privatising at least two of our Refineries.

Tinubulation in progress...



Thank goodness I get Agbadority ticket ..I go dey buy am at 75/litre

RightChannel:
NAME ONE THING APC CANNOT DESTROY?

I name 2



Hardship

Corruption

Hmmm. 1200 for a litre of petrol and minimum wage is just 30k.

..4 months from now Nigerians & the epi npa wa miscreants will definitely source fuel at 2000# a liter..

It is not suppose to take reasonable Nigerians to know that a certificate forger & a thief with identity crises who cried because of irreparable damage with a fraudulent certificate in Accountancy will destroy everything further more than what his master poo'hari previously destroyed

Kukutenla:

cc nairalanda1
Your Ogas say you should rest as the consequences of your beloved policies nor follow

It is like you don't even understand what I have been saying all this while.

Once subsidy went, prices were bound to go up. It makes common sense , because things have to be sold at a profit.

It is your oga Tinubu that is denying reality.

Good morning. Keep supporting APC, and keep supporting subsidy, while the realists like me keep supporting reality..which is things have to be sold at a profit..


P.S You are free to mock me as usual.

Kenochi:
What was said in this article is something some of us have always known
The price of Diesel as at December 2023 is over 1,000 while Kerosene and Aviation Fuel are between 700 to 1000+. No one needs to tell you that Petrol is being subsidized,forget whatever comes out from NNPCL
I have always said on some threads that Government needs to find a way to subsidize Diesel, Nigeria is perhaps the only economy in the world that is powered by Generators,it is very funny that this Government is still dilly dialing on what to do with our Electricity challenges
Funny Enough,the article has talked about the solution to reducing prices,once both the Dangote Refinery and Port Harcourt Refinery start operations,it is going to be game over for all this subsidy madness
I seriously encourage this Government to look at the possibility of fully privatising at least two of our Refineries
I don't understand why we need to have four Refineries,sell off two of those scrap metals to people who can run them
As for our Electricity woes,I still believe that Government should stop this National Grid Madness
Let states and Corporate Organizations start producing and distributing power to their citizens.Nothing stops this country from having 36 or more power distribution and generation companies
Who says a company can't generate electricity and sell to just a few customers,this idea that all Power generated must be fed to the National Grid must be critically assessed
Kindly check my signature to get good properties with good titles around the Ibeju Lekki Industrial Hub in Lagos State

Government needs to subsidise nothing.

The subsidy madness is why we have no refineries.

On the topic.

Basically, fuel should be above N1000 for the market to recover costs, and for the refineries to work well. It is insanity to keep it at N700 and below.

The problem is, most PDP, APC, LP and others support fuel subsides. Some even think the thing must be removed 'gradually'...which is kind of what Tinubu is doing,(and which everyone before has done, because, they want to stay in power) at the cost of a possible deficit in our budget.

We have kept subsides, because the lie of cheap fuel is seductive. So seductive, that the government won't face reality and remove subsides...because it would lose in 2027.

Sometimes I wish we had courageous government in Nigeria, but we don't. Meanwhile, we continue to lie to ourselves. The truth is , subsidy must go, and it must go totally. No ifs, no buts, no pretending it has been removed. Even if it means N2000 per liter, and it means I have to walk to work.

I wish GEJ had the balls to do this in 2012. But he was a listening leader, and he listened to Nigerians. Here we are. Hell, I wish Abacha or even IBB did this back then, but they got scared...

nairalanda1:
On the topic.

Basically, fuel should be above N1000 for the market to recover costs, and for the refineries to work well. It is insanity to keep it at N700 and below.

The problem is, most PDP, APC, LP and others support fuel subsides. Some even think the thing must be removed 'gradually'...which is kind of what Tinubu is doing,(and which everyone before has done, because, they want to stay in power) at the cost of a possible deficit in our budget.

We have kept subsides, because the lie of cheap fuel is seductive. So seductive, that the government won't face reality and remove subsides...because it would lose in 2027.

Sometimes I wish we had courageous government in Nigeria, but we don't. Meanwhile, we continue to lie to ourselves. The truth is , subsidy must go, and it must go totally. No ifs, no buts, no pretending it has been removed. Even if it means N2000 per liter, and it means I have to walk to work.

I wish GEJ had the balls to do this in 2012. But he was a listening leader, and he listened to Nigerians. Here we are. Hell, I wish Abacha or even IBB did this back then, but they got scared...

You won't have a job to return to
How many companies can afford to triple salaries?
Do you even know what u r talking about?

Hahaha! Welcome to Thiieerfnubu's 2024! The suffering of 2023 is just a child's play. APC did abysmally poorly but you people decided to reward them with a reelection.

Since Nigerians have decided to be zombies with no brains then they must suffer! Keep defending your oppressors. Na that Stockholm syndrome go kee una!

Agbado people said dangote refinery will handle the local fuel consumption of Nigeria, 6 months after its still yet to refine a singke liter of fuel, propaganda 🤣🤧🤣

Not that we don’t want Nigeria to work, but done if us are already used to these lies and deceit from govt that we have refused to be swayed by it, you can deceive all of the people some of the times, but you can never deceive all of the people all of the times

The same fraud of the Nigerian airways is what is playing out with dangote refinery and that PH refinery, none of can perform optimally even when they start performing, it does not guarantee reduction in the cost of petrol. Dangote is a business man, he owns the biggest cement distribution chain in Africa, his cement is the most expensive in Nigeria so how’s his fuel not going to be expensive as well

nairalanda1:
On the topic.

Basically, fuel should be above N1000 for the market to recover costs, and for the refineries to work well. It is insanity to keep it at N700 and below.

The problem is, most PDP, APC, LP and others support fuel subsides. Some even think the thing must be removed 'gradually'...which is kind of what Tinubu is doing,(and which everyone before has done, because, they want to stay in power) at the cost of a possible deficit in our budget.

We have kept subsides, because the lie of cheap fuel is seductive. So seductive, that the government won't face reality and remove subsides...because it would lose in 2027.

Sometimes I wish we had courageous government in Nigeria, but we don't. Meanwhile, we continue to lie to ourselves. The truth is , subsidy must go, and it must go totally. No ifs, no buts, no pretending it has been removed. Even if it means N2000 per liter, and it means I have to walk to work.

I wish GEJ had the balls to do this in 2012. But he was a listening leader, and he listened to Nigerians. Here we are. Hell, I wish Abacha or even IBB did this back then, but they got scared...

what is this one rambling about
GEJ Removed subsidy Jan 1 2012, tinubu mobilized nationwide protest to have that reverted, the economy abd everything else stood still for a week before it was reverted, so blame tinubu for not allowing it go in 2012

If fue sells at above 1000 like you said, how many companies can sustain operations, without cutting down on staff or production time. You removed subsidy but you haven’t made provision for adequate power supply, that’s insane and myopic

StaffofOrayan:


You won't have a job to return to
How many companies can afford to triple salaries?
Do you even know what u r talking about?

At the end of the day, things have to be sold at a profit, no matter what you think.

Gadafii:
...

No matter what you think, you won't sell goods at a loss to help the poor if you were a businessman. So why expect others to do so? What's good for you is good for others.

What kind of joke is this? Why should we be selling at dollar rate when our government had already pegged our price at 500+? So now for us to see PMS reduced, we'd have to work on our exchange rate...trust me, Nigerians will never want to see that happen

nairalanda1:


No matter what you think, you won't sell goods at a loss to help the poor if you were a businessman. So why expect others to do so? What's good for you is good for others.

so who the is the govt subsidizing fuel for, private owners of refinery to make more profit at the detriment of Nigerians??


Subsidy was the only things Nigerians benefited from successive govt, removing it without putting in place alternative options like steady power supply is anti people policy because Nigerian economy is based on fuel, slight increase in it triggers price hike in everything

Gadafii:
what is this one rambling about
GEJ Removed subsidy Jan 1 2012, tinubu mobilized nationwide protest to have that reverted, the economy abd everything else stood still for a week before it was reverted, so blame tinubu for not allowing it go in 2012

If fue sells at above 1000 like you said, how many companies can sustain operations, without cutting down on staff or production time. You removed subsidy but you haven’t made provision for adequate power supply, that’s insane and myopic

GEJ did not remove subsidy. He did the partial removal past leaders, and subsequent leaders had been doing.

But even then, if he had not done the partial removal, our debt would have been much higher than it is today.

Still, partial is not total. Half done is not done.

nairalanda1:


GEJ did not remove subsidy. He did the partial removal past leaders, and subsequent leaders had been doing.

But even then, if he had not done the partial removal, our debt would have been much higher than it is today.

Still, partial is not total. Half done is not done.

I can now tell you that you don’t know what you are saying, partial removal was the way to go, so that the economy can adjust to it gradually, while working on bringing the refineries to optimal capacity, instead of the abrupt and total removal APC govt did without any of the refineries working

You claim debt would have been higher, you honestly have no idea of what you are talking about, how much was our external debt Jonathan left for buhari, how much did buhari left for tinubu even without removing the subsidy, what was our external reserve pre-buhari regime and now, and lastly why did tinubu opposed the partial removal then just for him to support complete removal now, I need you to answer intelligently otherwise don’t bother to quote me cos I won’t reply you anymore

Gadafii:
so who the is the govt subsidizing fuel for, private owners of refinery to make more profit at the detriment of Nigerians??


Subsidy was the only things Nigerians benefited from successive govt, removing it without putting in place alternative options like steady power supply is anti people policy because Nigerian economy is based on fuel, slight increase in it triggers price hike in everything

Subsidy also wrecked our refineries, and contributed to sucessive bugdet deficits, and made us take more and more loans.

You won't sell your goods at subsidised rates if you were a businessman, because you won't see return on investments. The issue being the cost of production respects no man, as does the cost of transportation.