Petrol consumers in Nigeria may have to pay over N700 per litre for Premium Motor Spirit between July and December 2023, once the Federal Government ends the subsidy in June.
The latest industry data accessed by The Punch revealed that petrol consumers would spend a total of N8.4tn which represents a significant increase of about 250% from the N2.4tn PMS they would spend during the same period if the government retained fuel subsidy.
Oil marketers suggest that the average cost of petrol could rise to about N700/litre from July if the fuel subsidy is abolished in June as planned by the government.
The Chief Executive Officer of Nigerian National Petroleum Company Limited, Mele Kyari, stated in February that over 66 million litres of PMS were pumped daily into the market by NNPC Limited to keep the country supplied.
According to the report, If the subsidy is removed and the average cost of petrol is N700/litre, Nigerians would pay about N46.2bn daily for petrol, which translates to approximately N1.4tn monthly and N8.4tn in six months (July to December 2023).
The President of the Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, noted that if refineries are not working and the country depends on imports, the price of petrol may rise even above the projected N700/litre.
He explained that “When you check the landing cost, logistics, overhead, profit, etc., you might be looking at about N800, though the average is pegged at N700. And that is if we continue to depend on imports.”
According to the report, Gillis-Harry warned that if the dollar is accessed at the black market rate, then the average price could be between N1,400 to N1,700/litre.
The Secretary of the Independent Petroleum Marketers Association of Nigeria, Abuja-Suleja, Mohammed Shuaibu, also emphasized the importance of halting the subsidy regime. However, he explained that implementing this without functional refineries would lead to high PMS prices.
He stated, “By the time they remove subsidy and the refineries are not working, Nigerians should be ready to buy fuel at N700 or N800/litre… By the time the subsidy is removed and there is full deregulation, the landing cost alone could hit over N400, and after all other things are added, Nigerians should be ready to pay about N700/litre.”
In his words, “Maybe the incoming government will have a proper way of stopping fuel subsidy. How can you stop the subsidy when your refineries are not working? By the time they remove the subsidy and the refineries are not working, Nigerians should be ready to buy fuel at N700 or N800/litre
“The sole importer of this product is NNPC and the demand is high. The price in some parts of the East currently is above N300/litre. By the time the subsidy is removed and there is full deregulation, the landing cost alone could hit over N400, and after all other things are added, Nigerians should be ready to pay about N700/litre.”
