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Thursday, July 11, 2024

Tinubu Govt Still Paying Subsidy On Petrol – Oil Marketers

The Independent Petroleum Marketers Association of Nigeria (IPMAN) claimed that the federal government was secretly paying subsidy on petrol to maintain the current pump price.

We report that presently, petrol sells for between N568 and N617 in different parts of the country, and the ex-depot price of petrol stood at N580 per litre in Lagos on Thursday.

After adding the cost of conveying it to filling stations and the marketers’ profit margin, it ought to sell for between N620 and N630 per litre.

It was gathered that the difference, however, represents the subsidy that the government is surreptitiously bearing despite the fact that there is no budget for that.

In a chat with The Punch on Friday, IPMAN National Secretary, Chief John Kekeocha, said the decision of the government to put a cap on petrol prices meant that subsidy on the product had been reinstated.

He said, “The government is not being very transparent with this issue. When you say you have removed fuel subsidy, you don’t come again and moderate prices. It is like speaking with the two sides of the mouth.

“Removal of subsidy means you have removed your hands and the prices have to follow demand and supply. So if the NNPC says it is getting forex (foreign exchange) to import products and reduce prices for marketers, are they going to do the same for other importers? Remember that the government gave import licences to about seven marketers?

“Are they still going to moderate prices for those people when they bring in the product? No! You don’t blow hot and cold at the same time. There is no way they can bring in the product and reduce the price and peg it for marketers to sell at a certain level; it means they are indirectly bringing back subsidy.

“If they want to bring back subsidy, let them say it openly that we are going to come back to subsidy because of the pains the country generally is going through. This is because the initial things they are supposed to do they did not do. We have always been clamouring; let the refineries work.”

Also speaking, IPMAN Spokesman, Chief Chinedu Ukadike, insisted that subsidy on petrol was being returned gradually.

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He said, “You can also see the analysis that the Presidency made with the cost of the product in neighbouring countries, as well as in the international market. It said no country is selling non-subsidised petrol at N617/litre.

“But that is not a qualitative analysis. You will talk about the purchasing power of your own currency, as it were. In Ghana, a bottle of Coke is about N400, but it is about N200 in Nigeria. You won’t say because it is N400 in Ghana, Nigerians should also buy it at N400.

“So, that analogy by the Presidency in stating that petrol is cheaper here is not entirely correct. This takes us to the importance of domestic refining, which will enable us to check the demand for dollars and importation of petroleum products.

“If we actually want full deregulation, there must be local production that will check the rise in dollar. For once the dollar is rising, there’s nothing you can do to stop the simultaneous rise in petrol price.

“If not, it means the Federal Government is subsidising petroleum products, which implies that subsidy has indirectly returned.”