FG Silently Paying Petrol Subsidy
By Ogbolu George
Unknown to many Nigerians, the Nigerian National Petroleum Corporation (NNPC), has been offsetting for months the difference between the landing costs of petrol and the pump price.
On May 11, 2016, the Federal Government, through the Petroleum Product Pricing Regulatory Agency (PPPRA), had announced a new petrol regime of N135 to N145 from its previous N97,
However, in interviews with knowledgeable participants in the sector, it was discovered that what Nigerians pay at the pump is lesser than the landing costs per litre of petrol.
A staff in the Ministry of Petroleum Resources told NAN that the Federal Government has been quietly bearing the differential.
”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 staff said.
The recent smuggling of petrol across the porous Nigerian borders to Chad and Niger is also a cause for concern to the Nigerian Government, as a litre of petrol is being sold for N400 in Niger, as against the N145 that it is sold in Nigeria.
A staff of the Petroleum Products Pricing Regulatory Agency (PPPRA), said forex is a big issue at the moment.
”If indeed the product is being sold for N400 in Niger Republic like you said, the Nigerian marketer still 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,” the staff stated.
Also speaking, a source in the NNPC says the Federal government might soon find it difficult to pay the price difference, because the cost runs into billion and may overburden the government as the economy is still in recession.
