NNPCL, marketers clashes over subsidy, operators set petrol at N1,200 per litre

By: Manoah Kikekon 

The Nigerian National Petroleum Company Limited and fuel marketers affiliated with the Independent Petroleum Marketers Association of Nigeria on Tuesday, battled once more over the removal of petrol subsidies.

This occurred against the backdrop of the naira's decline versus the US dollar at both the official Investors & Exporters Window and the parallel market.The local currency closed at 998/dollar on Tuesday in the official market, while it traded at 1,225/dollar in the black market.

Because of the dropping naira, economists and oil marketers claimed that PMS subsidies were increasing recently, but the NNPC promptly refuted these claims, declaring that it was collecting its full cost.

On the back of the falling naira, economists and oil marketers claimed that PMS subsidy was increasing in recent times, but the NNPC quickly refuted these claims, declaring that it was recovering its full cost on the importation of Premium Motor Spirit, also known as petrol.

Bismarck Rewane, Chief Executive Officer of Financial Derivatives Company, explained during a live television programme on ChannelsTV on Sunday that the fuel subsidy was reduced rather than removed.

Similarly, oil marketers told PUNCH correspondent on Tuesday that petrol subsidies were increasing due to the naira's depreciation against the US dollar and the rising cost of crude oil, emphasising that in a free market, PMS should sell for N1,200/litre.

Petrol, which is solely imported into Nigeria by the NNPCL, is currently priced between N617/litre and N660/litre, depending on where you buy it in Nigeria.

Speaking on the subject, Dr Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise, stated that there was a partial subsidy on petrol, but that the commodity was subsidised by the government for political, social, and economic reasons.

PUNCH