Oil at $77 amid N6.07bn rise in daily petrol subsidy

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Factual Pursuit of Truth for Progress

 

The upward rise in global crude oil prices has spurred an increase in the daily subsidy on Premium Motor Spirit, also known as petrol, to N6.07bn.

Recall that petrol subsidy, which was removed in March 2020, resurfaced in the first quarter of 2021 as the government has left the pump price of the product unchanged since December despite the increase in global oil prices.

The Nigerian National Petroleum Corporation, which has been the sole importer of petrol into the country in recent years, has been bearing the subsidy cost since it resurfaced.

An analysis of data collated on Monday showed that the landing cost of petrol imported into Nigeria rose to N240.17 per litre as of June 25.

Reports say the landing cost of petrol rose to N231.98 per litre on June 16 from an average of N143.60 per litre in December, with an expected retail price of N254.90 per litre.

The Group Managing Director, NNPC, Mallam Mele Kyari, said last Tuesday that to fully recover costs, petrol should be selling for N256 per litre at filling stations.

“Today, we are paying N162 per litre (for petrol). I am sure many people buy AGO (diesel) in the market and it is selling at N280 per litre in the market today. So (there is) nowhere in the world diesel sells more expensive than PMS,” he had said.

The Petroleum Products Pricing Regulatory Agency had in March this year released a pricing template that indicated the guiding prices for the month.

The template, which showed that petrol pump price was expected to range from N209.61 to N212.61 per litre, was greeted with widespread public outcry and was later deleted by the agency from its website.

The pump price of petrol has remained at between N162 and N165 per litre at many filling stations in Lagos since December.

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