The Independent Petroleum Marketers Association of Nigeria have explained that the international price of crude oil and the exchange rate constitute the largest components of the cost build-up for PMS, accounting for over 80 per cent.
The PUNCH reported that the Secretary, IPMAN, Abuja-Suleja, Mohammed Shuaibu, said, “The rise in crude oil price and increase in forex will definitely raise the cost of petrol since the market has been liberalised. This is what you get in a deregulated market.”
Nigeria’s downstream oil sector became fully deregulated after President Bola Tinubu announced that fuel subsidy “is gone” on May 29, during his Inaugural ceremony.
This has skyrocketed the price of petrol from N198/litre in May to over N500/litre in June, before increasing to over N600/litre in July.
Meanwhile, the Chief Corporate Communications Officer, Nigerian National Petroleum Company Limited, Garba-Deen Mohammad, has insisted that since PMS had been subsidized, the oil firm would maintain the sale of petrol at the prevailing market price, explaining that the Federal Government was the one bearing the subsidy burden in the past.
He said, “It is the Federal Government that no longer has to bear the cost of subsidy. The Federal Government was bearing it and NNPC was going through under-recovery, because NNPC must import PMS and sell it at a price that is subsidized.
“And because of that, NNPC cannot say we will not import PMS since we will not sell it at the right price. This is because one of the fundamental mandates of NNPC is to ensure that there is energy security. So NNPC must import and must sell at a price that the government approves.”
