Nigeria National Petroleum Company Lmited NNPC keep mum as dealers insist Federal government is still paying subsidy.
The oil marketers on Monday projected that the subsidy of petroleum products will increase to about N707 Billion naira With a landing cost of N1,117 per litre for Premium Motor Spirit, popularly called petrol.
It was also gathered that as the Dangote Petroleum Refinery begins petrol production in August, the company might export the product following the crude oil supply crisis and other regulatory challenges confronting the $21bn refinery.
The information was gathered as a result of the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, meeting with officials of Dangote refinery, Nigerian National Petroleum Company Limited (NNPCL), Nigerian Upstream Petroleum Regulatory Commission (NUPRC)and Nigerian Midstream and Downstream Petroleum Regulatory Authority.(NMDPR)
The meeting was as a result of concern raised by the CEO of Dangote Refinery, Alhaji Aliko Dangote recently. The meeting chaired by the minister of petroleum for state Lokpobiri on Monday has the management of Dangote Refinary, NNPCL and oil sector regulatory operators in attendance.
Morealso, the House of Representatives inaugurated an investigative committee to look into the non-availability of crude oil to domestic refineries and allegations of deliberate hike in the cost of the product for profiteering as alleged by Dangote Refinery and other domestic refineries in the country.
The Major oil Marketers Association of Nigeria stated that the landing cost of petrol PMS as of the preceding day was N1,117/litre.
This came as the Independent Petroleum Marketers Association of Nigeria insisted that the Federal Government was still subsidizing PMS against the federal government claims. IPMAN stressed that this current pump price is not sustainable and might lead to an increase in the pump prices of petrol soon.
The association also made it known that the landing cost of products last week weer; diesel N1,157/litre, while that of aviation fuel was N1,127/litre.
While the pump prices of diesel and aviation fuel are considerably higher than their landing costs, the pump price of petrol is way lower than its landing cost.
Although retail outlets operated by the Nigerian National Petroleum Company Limited and some major marketers dispense petrol at between N617/litre and N670/litre, dealers said the ex-depot price of the commodity by NNPC is N585/litre.
He explain the Independent marketers hardly get the product at the N585/litre ex-depot price. They mostly buy from private depot owners at higher rates findings show. This makes their pump prices much higher. Some of them dispense the commodity above N700/litre.
NNPC is Nigeria’s sole importer of petrol. Other dealers stopped importing the commodity due to their inability to access the forex market ( US dollar) required for PMS imports.
The difference between the landing cost of N1,117 and an ex-depot price of N585 is N532. This implies that every litre of petrol consumed in Nigeria is subsidised by about N532.
Nigeria consumes tens of millions of litres of petrol daily. There are different petrol consumption figures from various agencies of the Federal Government.
NNPC, Nigerian Midstream and Downstream Petroleum Regulatory Authority, and the Federal Ministry of Petroleum Resources, have stated different figures ranging from 66.8 million litres in September 2022 to 44.3 million litres in October 2023.
When the most recent daily PMS consumption figure of 44.3 million litres is multiplied by the N532 subsidy reportedly paid on each litre of petrol, it gives N23.57bn as the daily subsidy spending.
This means that in 30 days, the petrol subsidy should gulp about N707bn.
The Secretary of IPMAN, Abuja-Suleja, Mohammed Shuaibu, said though the Federal Government and NNPC had claimed that there was no subsidy on petrol, the latest figures by MEMAN proved otherwise.
He said petrol subsidy was over N700bn monthly considering the landing cost of the commodity as revealed by Oil marketers.
“Petrol price is determined by the forces of demand and supply in the international market. When there is a global price increase, we should experience it in Nigeria.
The N1,117/litre is not just based on our foreign exchange rate, but also the global PMS cost. The sole importer of this product is NNPC and the company is not telling us the truth.
The IPMAN official insisted that if government was not subsidising petrol, it should have allowed the full deregulation of the downstream sector.
In April, El-Rufai told journalists in Maiduguri that many citizens were not aware that the government had reintroduced the PMS subsidy.
“Of course, you know NNPC will hide this information from you. Former Kaduna State Governor, Mallam Nasir El-Rufai, stated a few months ago that the Nigerian government is not telling Nigerians the truth about fuel subsidies because they are still paying subsidies.
“If they are not paying, why is it that up till now only NNPC is importing petrol when they claim that they have liberalised the market? They should open the market to competition by allowing investors to come in and compete favourably. This will crash the price of the product.
“The Federal Government is now subsidising fuel; many people don’t know this. It is the right policy. I have always supported the withdrawal of oil subsidies; but in the course of implementing the policy, the government realized that subsidy has to be back; right now, the government is paying a lot of money for subsidy, even more than before.
NNPC silent over allegation of paying subsidy
The Chief Corporate Communications Officer of NNPC, Mr Olufemi Soneye, did not respond to an enquiry on whether the national oil company was subsidising petrol based on the latest revelation of IPMAN.
Though Soneye had earlier insisted that the national oil firm had stopped subsidizing petrol (PMS).
The NNPC spokesperson said subsidy has not been reintroduced “We are recovering our full costs from the products we import. It is important to emphasis that the subsidy is no longer in place. Contrary to allegations, the petrol subsidy has not been reinstated,” the NNPC spokesperson had stated.
Before the recent revelation by oil marketers on the N1,117/litre landing cost of petrol, the GCEO of NNPC, Malam Mele Kyari, NNPC had claim after an audience with the President at the Aso Rock Villa a few months ago that fuel subsidy had not been returned.
“No subsidy whatsoever. We are recovering our full cost from the products that we import. We sell to the market, and we understand why the marketers are unable to import. We hope that they do it very quickly and these are some of the interventions the government is doing. There is no subsidy,” Kyari had stated.
But the Public Relations Officer of IPMAN, Chief Ukadike Chinedu, insisted that petrol prices at the pumps should be over N900/litre if the commodity was not subsidized.
