When President Tinubu announced the removal of petrol subsidy in his inaugural speech in May 2023, Nigerians expected that the disreputable regime of subsidy was in his words, \u201cgone.\u201d The retail price of petrol at the time of this announcement has seen at least two increases since then, with the fixed price now prevailing between N577 and N617. \u00a0It has however emerged that the prevailing retail price has held stable as a result of what appears to be government cushioning. Deterioration of the naira exchange rate to the United States dollar would seem to have affected the landing cost per litre of petrol in the country. <\/p>\n\n\n\n
Within the past two months, there were indications that to be able to\nhold the price of petrol at current rates and avoid social upheaval, the\ngovernment acted to reintroduce subsidy without explicitly saying so. Which\nwould of course defeat the earlier announcement of subsidy being gone. Reports showed\nthat a Federal Account Allocation Committee (FAAC) document indicates that the\nNigerian National Petroleum Company Limited (NNPCL) used $220 million out of\nthe $275 million dividends paid to the company by the Nigerian Liquified\nNatural Gas (NLNG), for petrol subsidy in August 2023. <\/p>\n\n\n\n
The Presidency has often referred to the removal of subsidy as being a\nnecessary measure with temporary adverse impact for long term economic benefit.\nIt has equally stated that addressing inefficiencies within the midstream and\ndownstream sub-sectors will ensure that petrol pump price is maintained without\nreversing the administration\u2019s deregulation policy in the oil industry. As a\nmeasure to address the soaring costs of petroleum products, President Tinubu\nproposed to revive at least one refinery by the end of the year. <\/p>\n\n\n\n
The government has explained that the retail price of petroleum products\nis determined by a combination of costs such as the cost of crude oil, cost of\nrefined petroleum products, freight and insurance, taxes, as well as\ndistribution and marketing costs and profits. Some of these costs are impacted by\nthe foreign exchange rate. With the depreciation of the naira and the\nfluctuating foreign exchange rates, it is no wonder that the NNPCL maintains a\nmonopoly in the importation of petrol due to its access to foreign exchange\nover independent importers. <\/p>\n\n\n\n
If indeed petrol subsidy has returned, then the country will be spending\njust as much if not much more funds on subsidy as was paid in the past. This\nwill be as a result of the increase in the overall costs of importing petrol\nfurther exacerbated by the foreign exchange crisis in the country. With the\nlast quarter of the year already counting, it may be a tall order to have one Nigerian\nrefinery up and running by December 2023. It will be recalled that in 2021, the\nFederal Executive Council under the administration of former President,\nMuhammadu Buhari, approved the rehabilitation of the Port Harcourt refinery for\nthe sum of $1.5 billion with several timelines listed for when it will become\noperational. Even as at March 2023, the former Minister of State for Petroleum,\nTimipre Sylva announced that the refinery would commence operations before the\nend of the second quarter of 2023. However, this has not come to be. <\/p>\n","protected":false},"excerpt":{"rendered":"
When President Tinubu announced the removal of petrol subsidy in his inaugural speech in May 2023, Nigerians expected that the disreputable regime of subsidy was in his words, \u201cgone.\u201d The retail price of petrol at the time of this announcement has seen at least two increases since then, with the fixed price now prevailing between […]<\/p>\n","protected":false},"author":2,"featured_media":2895,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-3405","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/posts\/3405","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/comments?post=3405"}],"version-history":[{"count":1,"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/posts\/3405\/revisions"}],"predecessor-version":[{"id":3410,"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/posts\/3405\/revisions\/3410"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/media\/2895"}],"wp:attachment":[{"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/media?parent=3405"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/categories?post=3405"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/tags?post=3405"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}