The Independent Petroleum Marketers Association of Nigeria (IPMAN) has raised an alarm that Nigeria’s fuel subsidy expenditure may exceed N700 billion monthly.
The revelation was made by IPMAN’s Secretary, Abuja-Suleja, Mohammed Shuaibu, in a statement on Monday.
Shuaibu was reacting to data released by the Major Energies Marketers Association of Nigeria (MEMAN), which showed that the landing cost of petrol had risen to N1,117 per litre. He questioned the accuracy of the Nigerian National Petroleum Company Limited (NNPC) and the federal government’s claims on fuel subsidy expenditure.
“Petrol price is determined by the forces of demand and supply in the international market. When there is a global price increase, we should experience it in Nigeria.
“Therefore the N1,117/litre is not just based on our foreign exchange rate, but also the global PMS cost. The sole importer of this product is NNPC and the company is not telling us the truth.
“But data sourced by our counterparts, the major marketers, showed clearly that the landing cost of petrol is above N1,100/litre. This means that the monthly subsidy has crossed N700bn.
“That also means we should be prepared so that any time the price of petrol jumps, we should not be surprised because they have already told us,” Shuaibu stated.
However, the Minister of State for Petroleum Resources, Heineken Lokpobiri, has maintained that fuel subsidies have been removed in Nigeria.
Despite this claim, analysis shows that the difference between the landing cost and ex-depot price of petrol indicates a subsidy payment of over N700 billion monthly.
Data reveals that while petrol is sold between N617 and N750 per litre depending on the location, the NNPC’s ex-depot price is N585 per litre. This means that the difference between the landing cost of N1,117 per litre and the ex-depot price is N532 per litre. Using the petroleum consumption figures of 44.3 million litres in October 2023, provided by the Federal Ministry of Petroleum Resources, and multiplying it by the estimated subsidy of N532 per litre, we get a daily subsidy spending of N23.57 billion.
Over a 30-day period, this translates to N700 billion in fuel subsidies.
