Sources says Petrol Subsidy is back

Recall that at a time, the Minister of State for Petroleum, Dr Ibe Kachikwu, said he would rather prefer to use the word liberalization than deregulation when the government announced the end of subsidy last year. He also said that the Federal Government's major plan was to stop importation of petroleum products at the long run.

After conducting series of interviews with some major players within the oil sector, reliable reports indicates that the landing costs per liter of petrol are higher than the price pay at the pump by Nigerians.

A reliable source who is a staff of the Ministry of Petroleum Resources said that, the current government being a listening type has been quietly bridging the differences between the landing and the pump price.

“The landing costs hovers around N160 to N165. The marketers buy from us and so the government bears it because it feels it will be unfair to make the consumer pay the difference.

“With the current recession, the government will not want to burden the people with a price hike,’’ the source disclosed.

The porous Nigerian borders to the republic of Chad and Niger has seriously become a source of encouragement to smugglers of petrol to this countries, where a liter is sold for over N400 compared to the Nigeria's pump price, N145.

Also, another source who is a staff of the Petroleum Products Pricing Agency (PPPRA), who preferred to be nameless, said the marketers had no right to divert fuel meant for the people.

He said, “For now Forex is a big issue,’’ the source said adding that “but the NNPC sells virtually everything it imports to them. So no marketer has any right to divert fuel.”

“If indeed the product is being sold for N400 in Niger Republic like you said, the Nigerian marketer has no right to look there.

“This is because NNPC is paying the difference just because it wants every Nigerian to have easy access to the white products.

“The fluctuating foreign exchange has not helped matters, but even the marketers cannot complain because government bears the brunt of the whole thing"

However, another source at the NNPC fears that government may find it difficult to continue with the subsidy as the economy is still battling with blows of recession.

The source disclosed that, “Soon the government may not be able to pay the price difference again because it runs into billions of naira."

“Recall that at a workshop last year, an engineer with the corporation had said partial deregulation was unreasonable, he was right.

“The solution is full deregulation. Let the consumer feel it once and for all. This politics of walking around the problem won’t help at all’’.

Recall that on May 11, 2016 the PPPRA on behalf of the Federal Government, announced a new petrol pump price of N135-N145, an increase from the heavily subsidised N97. An increase which had a notable effect on every sector within the country and even external.

The current global oil benchmark, Brent crude is $55.64 per barrel as against the $41 per barrel that led to the increase of petrol pump price from N97 to N145.