Report Reveals Increased Amount FG Allocates For Fuel Subsidy

Report Reveals Increased Amount FG Allocates For Fuel Subsidy

A recent report has unveiled that the Federal Government, through the Nigerian National Petroleum Company Limited (NNPC Ltd), is currently expending N17.72 billion daily to sustain fuel subsidy……READ ALSO M’Belt Group Warns Against FG’s Plan That Might Escalate Insecurity

This substantial subsidy expenditure is explained as the disparity between the landing cost of imported petroleum products and the effective wholesale price to petroleum marketers, as disclosed by an executive of a major petroleum marketing company in Lagos to Vanguard.

Additionally, the immediate past public relations officer of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chief Chinedu Ukadike, emphasized to the publication that the surge in petrol price is predominantly influenced by the depreciation of the Naira against the Dollar.

Ukadike elaborated that although the crude oil price has remained relatively stable over the past year, the weakening value of the Naira against the dollar has exerted significant pressure.

He argued that with the exchange rate shifting from N750/dollar when the subsidy was lifted last year to the current N1,600/dollar, it’s unrealistic to claim that petrol prices have remained unchanged.

Ukadike asserted, “Because NNPC is the sole importer of PMS in this country, it is very difficult for anyone to say for sure the actual cost of importing PMS into the country. Simple mathematics will tell you that the price cannot be the same when a dollar was exchanged for N750 and now that it is N1,600 to a dollar. What this means is that the price is above N1,000 per litre.

“So, the foreign exchange determines the price at the local market and if forex rate has increased, invariably, the landing price of petroleum products has also increased by the same magnitude. I don’t know the magic through which they continue to sustain the price of PMS at the same level.”

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