Oil sector operators have revealed that the amount spent as subsidy by the Federal Government on every litre of Premium Motor Spirit, popularly called petrol, consumed in Nigeria is currently above N600.
The oil marketers said that the cost of unsubsidized petrol was often higher than the cost of Automotive Gas Oil, popularly known as diesel.
In an interview with The Punch, the Deputy National President, Independent Petroleum Marketers Association of Nigeria (IPMAN), Zarma Mustapha, said the cost of petrol in Nigeria is about the cheapest in the world due to subsidy.
He said diesel price was currently between N800 and N850/litre, while the approved subsidised pump price of petrol had remained at N165/litre. Diesel is not subsidised.
“The cost of petrol in Nigeria is about the cheapest in the world. And this is because of subsidy. The subsidy is not small, it is so great.
“Diesel is going for about N850/litre currently because there is no subsidy on it. And this means petrol price should be almost same price if not for subsidy.”
He explained that this humongous subsidy spending by the government through NNPC was unsustainable, stressing that the crisis in the downstream oil sector was now affecting retail outlets seriously.
He said, “Many independent marketers who were selling at the N165/litre price have closed shop over time because it is not sustainable and is killing our businesses.
“So with the current dynamics going on in the industry, it is not realistic to sell PMS at N165/litre. I want to tell you one thing, in the whole world there is no place that petrol is being sold at the price we are selling it in Nigeria.”
The latest PMS evacuation from the Nigerian National Petroleum Company Limited (NNPC) on Sunday showed that the year-to-date daily consumption of petrol in Nigeria was 66.8 million litres.
Data released by the NNPC shows that the Federal Government spends about N40.1bn daily when subsidizing every litre of petrol consumed in Nigeria by at least N600. This also means that the government is spending about N1.243tn on fuel subsidy every month.
Based on this, it implies that the Federal Government through NNPC currently spends nothing less than N600 as subsidy on every litre of petrol consumed across the country.