FG Likely To Pay N1.68tn Fuel Subsidy, As Marketers Forecast N900/Litre

....operators commend FG for subsidy proposal, CSOs oppose fresh subsidy

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The Federal Government may likely spend about N1.68tn as subsidy on Premium Motor Spirit, also known as petrol, from September to December this year. This was contained in an analysis of data provided by oil marketers and the sector.

PMS dealers had yesterday Thursday, stated that the pump price of petrol should be between N890 to N900/litre based on Naira’s crash against the US dollar and the sharp rise in the price of crude in the international market.

Currently, petrol is sold between between ₦598 and ₦617/litre depending on the location of purchase, thereby fuelling suspicion that the commodity is being subsidized by the Federal Government.

Though government and the NNPCL have not officially admitted that subsidy on petrol has been reintroduced as President Bola Tinubu had on May 29th in his presidential inauguration speech announced the end of the subsidy regime.

No doubt, the removal of subsidy has led to an increase in the pump price of petrol from about ₦198/litre in May to the current rate of ₦617/litre. But the fall of the naira coupled with the rise in crude oil price have continued to mount pressure on the cost of PMS.

Dealers in the downstream oil sector explained that the cost of crude oil and the exchange rate of the naira-dollar accounted for over 80 per cent of the cost of PMS.


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