Business

Nigeria’s Fuel Subsidy Payment Exceeds N700bn Monthly – Marketers.

Published

2 months ago

July 23, 2024

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The Independent Petroleum Marketers Association of Nigeria, IPMAN, has said Nigeria’s fuel subsidy expenditure might cross N700 billion monthly.

The Secretary of IPMAN, Abuja-Suleja, Mohammed Shuaibu disclosed in a statement on Monday.

He was reacting to data released last Wednesday by the Major Energies Marketers Association of Nigeria, noting that the landing cost of petrol as of the preceding day was N1,117/liter.

Speaking to the MEMAN’s data, Shuaibu contended that the Nigerian National Petroleum Company Limited and the Nigerian government may not be telling the truth about the country’s fuel subsidy expenditure.

He warned Nigerians to be prepared for fuel pump price hikes.

“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/liter. 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 (Oil), Heineken Lokpobiri on several occasions had insisted that fuel subsidies remain removed in Nigeria.

Further analysis showed that although petrol goes for between N617 per liter and N750 per liter depending on the location, dealers said the ex-depot price of the commodity by NNPC is N585/liter.

This brings the difference between the landing cost of N1,117 and an ex-depot price of N585 to N532.

According to the Federal Ministry of Petroleum Resources, petroleum consumption figures of 44.3 million liters in October 2023, multiplied by the estimated N532 subsidy paid on each liter of petrol, give N23.57 billion as the daily subsidy spending.

The figure of the estimated fuel subsidy thereby amounts to over N700 billion in 30 days.

This comes amid the impasse between Dangote Refinery and the Nigerian Midstream and Downstream Petroleum Regulatory Authority over substandard petroleum products.

Meanwhile, the Lokpobiri on Monday, presided over a meeting with the heads of the Nigerian Upstream Petroleum Regulatory Commission and Nigerian National Petroleum Company Limited.

Recall that the former governor of Kaduna State, Mallam Nasir El-Rufai, had claimed that the President Bola Tinubu-led Federal government is paying more on fuel subsidies than before.

Similarly, the President of the Trade Union Congress, Festus Osifo had also hinted at the government is applying a quasi-fuel subsidy on petrol.

Business

DANGOTE REFINERY WILL NOT SELL FUEL BELOW MARKET PRICE —TINUBU PRESIDENCY

Published

1 day ago

September 6, 2024

Ekwutos Blog

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The Nigerian Presidency has said that Dangote Refinery will not sell its product including Premium Motor Spirit (PMS) below the official market price.

On Tuesday, Aliko Dangote, the Chairman of the Dangote Group, formally declared the commencement of petroleum production at his highly anticipated refinery. This significant milestone marks a major breakthrough in Nigeria’s energy landscape.

During the announcement, Mr. Dangote revealed that the pricing strategy for the refined petroleum products would be determined through collaborative efforts between the Federal Executive Council (FEC) and the Nigerian National Petroleum Company (NNPC) Limited.

Business

FG to allow Dangote Refinery fix petrol price – Report

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2 days ago

September 5, 2024

Ekwutos Blog

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The Federal Government is reportedly set to allow Aliko Dangote’s refinery to fix petrol prices.

This is according to a report from Bloomberg.

Recall that the Dangote Refinery on Tuesday began the production of long-awaited petrol, a development that is a major milestone in Nigeria’s energy sector.

Since then, many Nigerians have been keen to find out the price at which the businessman will sell his petrol.

However, Aliko Dangote has stated that it is not his role to set petrol prices; he will leave that responsibility to the Federal Government.

His primary focus is to ensure that petrol is available.

But Bloomberg reports that the Dangote Refinery, located in Ibeju Lekki, Lagos, with the approval of the Nigerian Government, will begin setting prices for petroleum marketers starting next month (October).

This marks a significant departure from the current practice where the state-owned NNPC Ltd. has been the sole price setter.

Previously, NNPC sold gasoline below market value to mitigate price increases, but it recently raised the price to align more closely with market rates.

Government officials have indicated that Dangote’s refinery will determine its own pricing strategy, and oversight will be limited to ensuring product quality and preventing exploitation.

“Dangote Refinery will certainly not sell their products below market value as a business that was set up to make profit,” a government spokesman Temitope Ajayi told Bloomberg.

“I don’t see how NNPC or the federal government will control price for a private business,” he said.

“Going forward, petrol marketers will be allowed to buy products directly from the Dangote Refinery.” another source said.

The shift comes amid widespread gasoline shortages and substantial debts incurred by NNPC, which has disrupted supply.

The Dangote Refinery is projected to produce around 330,000 barrels of gasoline daily, surpassing 1% of global demand, potentially stabilizing the local market and reducing Nigeria’s dependency on imports.

Business

Federal Government Will Determine Price Of Our Petrol- Dangote

Published

3 days ago

September 4, 2024

Ekwutos Blog

Aliko Dangote

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Federal Government Will Determine Price Of Our Petrol.

“On PMS price, it is an arrangement that is designed and approved by the Federal Executive Council led by His Excellency, President Bola Ahmed Tinubu.

As soon as it is finalized, which is what he is pushing once he finishes with FEC meeting, it can be today or Tomorrow we are ready to roll out in the market”

ALIKO DANGOTE