The federal government of Nigeria has denied paying subsidies for petrol despite increased landing costs exceeding N1,000 per liter. The Minister of Finance, Wale Edun, emphasized that no budget allocations or payments have been made for subsidies since President Tinubu ended the fuel subsidy regime on May 29, 2023. Meanwhile, petrol prices at filling stations have risen, with the average pump price now at N750 per liter. The Nigerian National Petroleum Company Limited (NNPCL) is managing the impact of exchange rate fluctuations without government subsidies.
According to recent reports from the Major Oil Marketers Association of Nigeria, the landing cost of Premium Motor Spirit (PMS), commonly known as petrol, was N1,117 per litre as of July 16, 2024.
This calculation is based on the prevailing exchange rate of N1,500 to one US dollar.
Despite the significant increase in landing costs, the federal government insists that no payments have been made to cover the under-recovery of imported petrol products since May 29, 2023, when President Bola Tinubu abruptly ended the fuel subsidy regime.
Wale Edun stated:
“Mr. President said on May 29 that subsidy is gone. Subsidy is gone. We do not have a line in the budget for subsidy payment. “We do not have payments being made, whether in the budget or out, by the federal government of Nigeria or even the federation directly for subsidy.”
Edun stressed that the Nigerian National Petroleum Company Limited (NNPCL) has been absorbing the impact of exchange rate fluctuations as part of its responsibility to ensure the availability of petrol in the local market. This arrangement, he emphasized, does not equate to a government subsidy.
Meanwhile, petrol pump prices across various filling stations have been adjusted yet again. The National Bureau of Statistics price watch report showed that the average pump price of petrol increased to N750 per litre from previous price of N545.83 per litre as at 2023.
The report stated that Benue State had the highest petrol price at N864.55 per litre, followed by Jigawa and River states at N847 per litre and N810 per litre, respectively. The rising petrol prices are one of the reasons Nigerians are considering a nationwide protest on August 1, 2024.