- The cost of fuel, which is currently between N560 and N620 per litre across the country, should have been higher
- This is because President Tinubu, during his inaugural speech, announced that market forces would now determine fuel prices
- The rising crude oil price, which is now $90 per barrel, should mean a new pump price, but NNPC has found new ways to fulfil Tinubu’s promise
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The Nigerian National Petroleum Company Limited (NNPCL) has managed to keep the price of Premium Motor Spirit (PMS), popularly known as petrol, low despite global crude oil prices rising.
On Monday, September 5, 2023, Brent crude, the international benchmark for crude oil price, crossed $90 per barrel, the highest level since November 16, 2022.
The Guardian reports that, by implication, the pump price of PMS should hover between N818 and N833 per litre.
NNPC keeps prices low
Currently, a litre of petrol is sold for between N580 and N640 depending on the location in the country.
In neighbouring countries, such as Cameroon, a litre is sold at N1,082.70 per litre; in Benin, it’s N1,008.90; in Sierra Leone, it’s N1,143; in Togo, it’s N1,037; in Ghana, it’s N1,047; and in Guinea, it’s N1,258.20.
The significant difference in pump prices between Nigeria and its neighbouring countries suggests that the president may have reinstated the fuel subsidy.
A marketer recently licensed to import fuel into the country shared insights with the Guardian on how NNPC has maintained petrol prices at N600 average despite rising crude oil prices.
“NNPC unofficially has been told to subsidise PMS through exchange rates.
They are getting dollars from crude oil sales. It is their money they can decide to do with the exchange rate at N1 to $1 or N915 to $1, whatever they do, it is in their books, they aren’t looking for forex anywhere.
“But we marketers have to go out and look for forex, and it is this forex that impacts what we sell.”
Has fuel subsidy returned
Also reacting, a Lagos-based economist, Tunji Adeboye, told Legit.ng that fuel subsidy has returned, and the government is simply concealing the truth.
“No reason petrol should be selling at an average price of N600, considering the current global crude oil price. I urge the federal government to publish its pricing template to justify the current pump price.
“The landing cost for imported products has increased. The government should be transparent about this and let us know where we are as a country.”
“Expect cheap fuel, strong Naira”: NNPC tells Nigerians after securing $3bn loan
Meanwhile, in another report, the Nigerian National Petroleum Corporation (NNPC) Limited has secured a $3 billion loan from AfreximBank.
The new loan will help strengthen the naira against the dollar and ultimately reduce the cost of petrol in the country.
NNPC Limited has provided a breakdown explaining that the loan is simply an upfront cash loan against proceeds from future crude oil production.