…officials say nothing like that
…there is technically a subsidy of about N150 per litre as at today
The Federal Government may be returning to a subsidy regime on fuel in grand style with its latest announcement that it will not allow an increase in the price of Premium Motor Spirit or Petrol.
The implication of the pronouncement is that no marketer will import petrol into the country and the responsibility would solely be on Nigerian National Petroleum Company Limited (NNPCL) which will be imported and selling the product at a subsidized rate.
Despite this development, the government is stating that it would not allow any increase in the price of petrol on the one hand on another it is claiming that it is not returning to subsidy regime.
But subsidy has already crept in, which is why no marketer other than the initial ones have brought in fuel again.
Let us be very clear, as at today there is subsidy in PMS . Platts gasoline traded at $960 per MT today. With exchange rates at N950 to the dollars, FOB prices offshore Lome should be about N680 per liter. With NNPC PFI prices still around N523 per liter, there is technically a subsidy of about 150 naira per liter as at today
This economy analysts said contradicts the spirit of market forces which is encapsulated in the theory of demand and supply
According to the Special Adviser to the President on Media and Publicity, Ajuri Ngelale, he said: “President Bola Tinubu on Tuesday assured Nigerians that there will be no increase in the pump price of Premium Motor Spirit (PMS), or petrol, anywhere in the country.
The Special Adviser to the President on Media and Publicity, Ajuri Ngelale, noted that the market has been deregulated and will remain so.
He emphasised that government will address the inefficiencies within the midstream and downstream petroleum subsectors to maintain prices where they are without having to resort to a reversal of the administration’s policy in the petroleum industry.
Also re-emphasing the same position of the President, a senior Adviser to the President, Temitope Ajayi, on his Tuesday on his Twitter handle stated: “There were no plans by the administration of President Bola Tinubu to reintroduce fuel subsidy.”
He said, “There is no plan to reintroduce any form of fuel subsidy. There is no condition to support any increase in prices at this time. President Tinubu is convinced based on information before him that we can maintain current pricing without reversing the current deregulation policy by swiftly cleaning up existing inefficiencies within the midstream and downstream Petroleum sector.”
Ajayi’s comment followed news about a temporary reintroduction of fuel subsidy following the increment in the landing cost of fuel due to the free fall of the Naira in the parallel market.
The clarification became necessary after marketers on Sunday came out to say that the appropriate price for a litre of Petrol should be between N700 and N800 per litre given the prevailing foreign exchange situation in the country. The USD is now exchanged for approximately about $ 1 to N1000. It is feared that it might even be more than that as time goes on.
All these are coming just less than 24 hours after the Nigerian National Petroleum Company (NNPC) Limited said it had no plan to raise the pump price of petrol.
In a terse statement on Monday night, the company urged Nigerians to disregard speculations of a fresh hike in the price of the premium product, an apparent response to the Nigeria Labour Congress’ (NLC) warning.
The NLC President, Joe Ajaero, on Monday warned that it would embark on an indefinite strike in the event of another petrol price hike by the NNPC Limited.
Oil marketers have withdrawn from importation after a few of them made initial efforts. This because the landing cost of the product became higher than the pump price of the product.
Currently, not many marketers are selling product because the NNPCL can not provide enough of the commodity to go round the country. So gradually queues occasioned by scarcity are setting in.
