Premium Motor Spirit (PMS), often known as petrol, has risen to an astounding N978 a litre, according to The News Chronicles’ research, yet Nigerians are still struggling with a shortage of fuel.
The landing cost of petrol, which includes the product’s international pricing, transportation, insurance, and other expenses, climbed to N978/litre from N720/litre in October 2023 at the black-market rate of N1,500 per dollar, according to research.
“The rising landing cost of petrol is the outcome of the rising foreign exchange crisis. There are market interventions through subsidies because most Nigerians cannot afford the market price for petrol,” claimed a top executive in the downstream sector.
On Monday, the naira plunged to a three-month low of N1,530 per dollar on the black market, or parallel market, as end users’ desire for the dollar increased.
In comparison to the N1,520 that was quoted on the black market on Friday, this indicates a 0.65 percent (N10) loss. On July 9, 2024, local currency was valued at N1,5723 per US dollar, based on information compiled by FMDQ.
According to Aisha Mohammed, an energy analyst at the Centre for Development Studies in Lagos, the government is partially subsidising the commodity for social, political, and commercial reasons.
“Those of us who advocated for the elimination of the subsidy now see that it has been largely eliminated, but consider the repercussions. It will sound fine economically, but it will be expensive politically and socially, Mohammed added.
Subsequent research revealed that the N978 landing cost does not include other distribution costs, vessel charges, Nigerian Maritime Administration and Safety Agency charges, or charges from the Nigerian Ports Authority.
A study to lower petrol prices is being called for by some experts, as some of these are charged in dollars.
Requests to the Nigerian National Petroleum Company Limited (NNPC) chief corporate communications officer, Olufemi Soneye, seeking confirmation of whether the federal government has returned to petrol subsidy were unsuccessful.
In his inaugural speech on May 29, 2023, President Bola Tinubu proclaimed that the fuel subsidy was no longer available. The NNPC subsequently put this announcement into force the following day.
Petrol was priced at less than N190 a litre at the pump prior to Tinubu’s announcement. But following the president’s remarks, it surged to more than N500 per litre and then increased once again to more than N600 per litre a few weeks later.
The federal government has consistently denied providing any petrol subsidies, but TNC was able to view a report that the finance minister, Wale Edun, gave to President Tinubu that included the government’s anticipated petrol subsidies.
The study estimates that gasoline subsidies will cost roughly N5.4 trillion in 2024 as opposed to the N3.6 trillion allocated for the same intervention in 2023.
The minister of finance, Edun, also stated to reporters that the process of eliminating subsidies is still underway, implying that it has not yet been fully accomplished.
In an interview conducted in May, Edun stated, “It is an ongoing conversation, it is an ongoing process to ensure that fuel subsidy that fuel subsidy is eliminated from the Nigerian economy, that is what Mr. President intent is and that is what is being worked towards.”
Black marketers took advantage of the long lines of drivers at the few gas stations on Tuesday by boosting their prices to between N1,000 and N1,100 per litre. In several retail establishments, particularly in Abuja, Nasarawa, and Niger, the pump price was raised to N900 per litre.
The NNPC Limited clarified that the delays were caused by recent thunderstorms and logistical issues that interfered with fuel-loading jetties’ operations. To address the issue and shorten the lines, the corporation did, however, clarify that it is collaborating with relevant parties.
