By Adedapo Adesanya
Some Nigerians are expressing their anger over reports that the price of premium motor spirit PMS), otherwise known as petrol, could sell for as high as N1,20o per litre following a worsening foreign exchange (FX) rate that is making it harder to sell at a lower price.
Petrol, which is solely imported into the country by the Nigerian National Petroleum Company (NNPC) Limited, currently sells between N568/litre and N660/litre, depending on the location and the retail station.
Oil marketers, who buy from the NNPC and distribute to retailers, said that the subsidy on petrol was increasing considering the crash of the Naira against the United States Dollar and the cost of crude oil, stressing that PMS should sell for N1,200/litre in a free market.
Recall that President Bola Tinubu when he assumed office announced an end to the subsidy regime, but stakeholders have over the last few months argued that subsidies had made a return, considering the price of petrol didn’t fluctuate following the changes in the international crude market.
Before the takeover, the pump price of petrol was below N190/litre, but it jumped to over N550/litre after the President’s statement and moved up again to over N600/litre a few weeks later.
With the latest development, Nigerians have since lamented the possible effect that the 100 per cent increase in petrol would have on their pockets, ranging from transportation to food prices.
The National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria, Mr Ukadike Chinedu, stated that the subsidy on petrol was rising and that the cost of the commodity should be around N1,200/litre according to market laws.
“To be pragmatic in this analysis let’s consider the cost of petrol today in the United States. For premium petrol, it is $2.99, while super petrol sells for $3.15 or $3.10 depending on the part of the country where you are making the purchase.
“Now, $3 in Nigeria is over N3,000, because a Dollar in the parallel market is over N1,000. You can also see the cost of diesel, which is over N1,000/litre, and it is important to state that petrol is usually higher in price than diesel in a free market.
“So, if you consider the cost of diesel, dollar and other international factors, the price of petrol in Nigeria should be around N1,200/litre, but the government is subsidising it, which to an extent is understandable,” he said, according to ThePunch newspapers.
The Tinubu administration some months ago announced plans to alleviate the effect of the subsidy removal with some interventions, but so far, there has been little to no impact from the several measures announced by the president in July 2023.
This report that the product should be selling at over N1,000 per litre has generated reactions, topping the Trend list on X, formerly known as Twitter.
