BUSINESS DAY
Nigerians continue to grapple with petrol scarcity as the landing cost of Premium Motor Spirit (PMS), also known as petrol, has surged to a staggering N978 per litre, according to findings by BusinessDay.
At the black-market rate of N1,500 per dollar, findings showed the landing cost of petrol, which includes the product’s international price, shipping, insurance, and other charges, increased to N978 /litre from N720/litre in October 2023.
“The rising landing cost of petrol is a result of the rising FX crisis. There are interventions in the market through subsidies as most Nigerians cannot afford the market price for petrol,” a senior executive in the downstream sector said.
The naira on Monday hit a three month-low of N1,530 per dollar on the parallel market, also known as the black market, following renewed pressure on demand for the greenback by the end users.
This represents 0.65 percent (N10) lost compared to N1,520 quoted on Friday on the black market. The local currency was quoted at N1,5723 per dollar on July 9, 2024 according to data collated from FMDQ.
Aisha Mohammed, an energy analyst at the Lagos-based Centre for Development Studies, said the commodity is being partially subsidised by the government for political, social and economic reasons.
“All of us who were saying that they should remove the subsidy, we can see that they have partially removed it now, but look at the consequences. Economically, it will sound good, but socially and politically, it is very costly,” Mohammed said.
Further findings showed the landing cost of N978 does not include Nigerian Ports Authority charges, vessel charges, the Nigerian Maritime Administration and Safety Agency charges, and other distribution costs.
Some of these are charged in dollars, and some experts are calling for a review to reduce petrol costs.
“We must resist the dollarisation of the Nigerian economy. There are some fee collections in dollars that are also pushing up the landing cost of petrol,” a source said.
Efforts to get Olufemi Soneye, chief corporate communications officer at Nigerian National Petroleum Company Limited (NNPC), to confirm if the federal government has reverted to petrol subsidy proved abortive.
President Bola Tinubu, during his inaugural speech on May 29, 2023, declared that subsidy on petrol was gone, a declaration that was effectively implemented the next day by the NNPC.
Before Tinubu’s declaration, the pump price of petrol was below N190/litre. However, it jumped to over N500/litre after the president’s statement, and moved up again to over N600/litre a few weeks later.
READ THE FULL STORY IN BUSINESS DAY
