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Monday, May 20, 2024

Fuel price debate: Marketers insist subsidy is back

NNPCL has denied the reintroduction of subsidy, attributing queues at petrol stations to distribution challenges rather than a lack of supply

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Oil marketers in Nigeria are pushing back against the Federal Government’s position on the current pump price of Premium Motor Spirit (PMS), commonly known as petrol, insisting that it should not be less than N800 per liter if there is no subsidy on the commodity. The government, through the Nigerian National Petroleum Company Limited (NNPCL), has denied reintroducing a subsidy on petrol.

While petrol currently sells between N580 and N617 per liter, depending on the location, the Group Chief Executive Officer of NNPCL, Mele Kyari, recently denied the reintroduction of a subsidy, attributing queues at petrol stations to distribution challenges rather than a lack of supply.

However, oil marketers are challenging Kyari’s statement, asserting that the government is subsidizing gasoline. They argue that with the current exchange rate and other economic factors, the landing cost of petrol is around N720 per liter, making the current selling price unsustainable without a subsidy.

The National Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chief John Kekeocha, criticized the government for what he perceives as misleading statements. He highlighted the high cost of diesel, essential for the operations of filling stations, as a major challenge for independent marketers.

Kekeocha emphasized that if the government doesn’t address the issue promptly, many filling stations, particularly those operated by independent marketers, may face closure, leading to scarcity in several locations.

Responding to the government’s claim that there is no subsidy, Kekeocha argued that the cost of gasoline is being artificially kept low to avoid public backlash. He urged the government to be transparent and address the fundamental issues in the downstream sector, such as the need for refineries to function optimally.

The National President of the Natural Oil and Gas Suppliers Association of Nigeria, Benneth Korie, also expressed concerns about the impact of the high cost of diesel on businesses in the downstream oil sector. He recommended declaring a state of emergency for refineries and providing palliatives to marketers for diesel importation.

The ongoing debate highlights the challenges and complexities surrounding fuel pricing in Nigeria, with the government facing pressure to address economic realities while maintaining affordability for consumers.

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