The Nigerian National Petroleum Company Limited (NNPCL) and fuel marketers, represented by the Independent Petroleum Marketers Association of Nigeria, found themselves in another dispute over the removal of the subsidy on petrol. This disagreement occurred amidst the depreciation of the naira against the United States dollar in both official and parallel markets.

The official market closed with the naira at 998/dollar, while the black market saw it trading at 1,225/dollar. The fluctuating naira rates prompted economists and oil marketers to argue that the subsidy on Premium Motor Spirit (PMS or petrol) was increasing. However, the NNPC countered these claims, asserting that it was recovering the full cost of importing petrol.

Bismarck Rewane, CEO of Financial Derivatives Company, clarified during a TV program that the fuel subsidy was not completely removed but reduced. Meanwhile, oil marketers contended that the subsidy on petrol was on the rise due to the devaluation of the naira and the cost of crude oil. They suggested that PMS should ideally sell for N1,200/litre in a free market.

Petrol,  solely imported by the NNPCL, currently sells for N617 to N660/litre in Nigeria. Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, acknowledged partial subsidy on petrol, attributing it to political, social, and economic  reason.

However, the NNPCL’s Chief Corporate Communications Officer, Olufemi Soneye, dismissed the claims of economists and marketers, reiterating that the Federal Government had indeed removed the subsidy on petrol. This decision, declared by President Bola Tinubu in 2023, led to a significant spike in petrol prices.

Rewane emphasized that the subsidy on petrol was reduced, not eliminated, highlighting the impact on consumers’ income due to increased taxes. Oil marketers projected that in a free market, petrol prices should be around N1,200/litre, considering international factors.

Ukadike Chinedu, National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria, argued for the pragmatic consideration of petrol costs, suggesting that the government was implementing a quasi-subsidy by retaining a portion of it.

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