By Ayo Yusuf
Despite President Bola Tinubu’s boast at his inauguration that fuel subsidy was no more, the National President of the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, Festus Osifo, has claimed that the federal government was still paying subsidy on petroleum products.
Mr. Osifo who is also the president of the Trade Union Congress, TUC, and a vital part of the process that led to an agreement with the FG to postpone the strike originally called for Tuesday, spoke on Channels TV’s Politics Today on Friday.
He said due to the cost of crude oil in the international market and the dollar to naira rate, the government still pays subsidy for the product.
According to Osifo, “They [government] are paying subsidy today. In reality today, there is subsidy because as of when the earlier price was determined, the price of crude in the international market was somewhere around $80 for a barrel.
“But today, it has moved to about $93/94 per barrel for Brent crude. So, because it has moved, then the price [of petroleum] also needed to moved.”
He further noted that for the government to stop subsidising petroleum, “The only reason the price will not move is when you are able to manage your exchange rate effectively and you are able to pump in supply and bring down the exchange rate.
“So, if the exchange rate comes down today, we will not be paying a subsidy. But with the exchange rate value and the price of crude oil in the international market, we have introduced a subsidy.”
No Price Increase Planned
Meanwhile, the Nigerian National Petroleum Company Limited (NNPCL) said it has no intention of increasing the pump price of petroleum despite the fluctuation of the nation’s currency in the foreign exchange market.
The oil company said this in a statement posted via its official X platform on Friday.
The NNPCL was reacting to speculations in the public domain about the company’s plan to raise petrol pump price from the current N617 per litre to above N700.
The NNPCL said rumours that it was planning to increase pump prices were false and urged Nigerians to disregard such stories.
Part of its statement reads:
“Dear esteemed customers, we at NNPC Retail value your patronage, and we do not have the intention to increase our PMS pump prices as widely speculated.
“Please buy the best quality products at the most affordable prices at our NNPC Retail Stations nationwide.”
The NNPCL had in May begun adjustment of pump prices of fuel due to the announced removal of petroleum subsidy to allow market forces to determine prices.
President Bola Tinubu had, in his inaugural address on 29 May, announced the removal of fuel subsidy.
Following the president’s announcement, the NNPCL directed its outlets nationwide to sell fuel between N480 and N570 per litre, an almost 200 per cent increase from the initial price below N200, leading to an increase in transportation fares and prices of goods and services by various percentages.
Again in July, petrol pump prices rose to N617 per litre at various outlets of the NNPCL in Abuja and other parts of the country. The NNPCL attributed the rise in the petroleum pump prices in the country to ‘market forces’.
The NNPCL Group Chief Executive Officer, Mele Kyari, while speaking to journalists after a closed-door meeting with Vice President Kashim Shettima at the State House in Abuja, said with the deregulation of the oil sector, market realities will force the price of petrol up sometimes and at other times force it down.
His words: “We have the marketing wing of our company. They adjust prices depending on the market realities.
“This is really what is happening; this is the meaning of making sure that the market regulates itself so that prices will go up and sometimes they will come down also. This is what we have seen, and in reality, this is what (how) the market works.”
