Business

Stakeholders, Others Disagree Over $800m Fuel Subsidy Palliative

Published

2 years ago

April 25, 2023

Stakeholders in the petroleum industry, weekend, frowned over the Federal Government’s proposed $800 million fuel subsidy palliative to be shared with Nigerians.

As part of a palliative targeted at easing the pains of Nigerians, $800 million has been proposed for distribution to 10 million households.

But in an interview with Vanguard, Executive Director of Emmanuel Egbogal Foundation, Professor Wumi Iledare, said, “Subsidy is not anti-economics but the application of the tool has become an enigma in Nigeria’s economy perhaps because of lack of transparency and accountability. However, borrowing money for transfer payments to avert social unrest or protest against PMS subsidy removal is not sustainable and it is just a postponement of the evil day.

“The option for the government today is a partial price deregulation phased over a period by regulation with price modulation mechanism.

“Price discrimination is also a possibility, which has theoretical underpinnings. The $800 million seems to be politically laudable. It’s not just economically feasible in the long term to minimize the social welfare losses that come with subsidy. Increasing wages is not recommended under the prevailing inflationary economy. It will be a double shock to a sluggish economy.”

Also, Managing Director, Winman Nigeria Limited, Dr. Godwin Orovwiroro, faults the government’s planned palliative, adding that “the $800 million loan is intended to cushion the impact of subsidy removal particularly the effect on the economically disadvantaged Nigerians. Subsidy removal has been on the front burner of economic and political policies and it appears to be the only issue being flaunted by politicians as our economic ailment.”

He said: “Some believe that its removal will cure our social malaise. These are narrow-minded approaches as no empirical evidence exists to show that the injection of the loan will solve anything. Let us examine the basis of fuel subsidy. The government’s position is that the cost of importation, including landing charges is more than the selling pump price. The differential being borne by the government represents the subsidy since the dispensing price is fixed and not subject to market forces.

“What they fail to tell us is that as long as the Naira keeps falling against the dollar, the subsidy malaise will never be cured. The exchange rate has become the amplifier of subsidy and the equation will always tilt to the negative until we embark on production for export to stabilize the exchange rate by the government to ease logistics of fuel distribution across the country as well as domestic freight costs.”

VANGUARD

Business

JUST IN: Dangote Refinery Hikes Petrol Ex-depot Price

Published

5 days ago

June 20, 2025

Editor

Nigerians may soon pay more for petrol as the Dangote Petroleum Refinery on Friday increased its ex-depot price for Premium Motor Spirit to N880 per litre, raising fresh concerns over fuel affordability and price volatility in the downstream sector.

Checks on petroleumprice.ng, a platform tracking daily product prices, and a Pro Forma Invoice seen by The PUNCH confirmed the hike, representing a N55 increase from the previous rate of N825 per litre.

The increment would ripple across the entire fuel distribution chain, likely pushing pump prices above N900/litre in some parts of the country, especially in areas far from the distribution hubs.

The hike comes despite global crude prices falling. Brent crude dipped by 3.02% to $76.47, WTI fell to $74.93, and Murban dropped to $76.97 on Friday. The decline in benchmarks offers little relief due to persistent fears of sudden supply disruptions.

The refinery has increased its reliance on imported U.S. crude and operational costs amid exchange rate instability, which adds to its pricing pressure.

On Thursday, the President of the Dangote Group, Aliko Dangote, said his 650,000-barrel capacity refinery is “increasingly” relying on the United States for crude oil.

This came as findings showed that the Dangote Petroleum Refinery is projected to import a total of 17.65 million barrels of crude oil between April and July 2025, beginning with about 3.65 million barrels already delivered in the past two months, amid ongoing allocations under the Federal Government’s naira-for-crude policy.

Dangote informed the Technical Committee of the One-Stop Shop for the sale of crude and refined products in naira initiative that the refinery was still battling crude shortages, which had led it to resort to imports from the United States.

On Monday, the president of the Petroleum and Natural Gas Senior Staff Association of Nigeria, Festus Osifo, accused oil marketers of exploiting Nigerians through inflated petrol prices, insisting that the current pump price of PMS should range between N700 and N750 per litre.

He criticised the disparity between falling global crude oil prices and the stagnant retail price of petrol in Nigeria.

“If you go online and check the PLAT cost per cubic metre of PMS, convert that to litres and then to our Naira, you will see that with crude at around $60 per barrel, petrol should be retailing between N700 and N750 per litre.”

He asserted that if Nigerians bear the brunt of higher fuel costs, they should be allowed to enjoy the benefit of low pricing.

His forecast of increased costs now appears spot on, considering the latest developments.

Marketers are already adjusting. Depot owners and fuel distributors in Lagos and other cities anticipate a domino effect, with new price bands expected to follow Dangote’s lead.

Many had held back pricing decisions since Tuesday, when the refinery halted sales and withheld fresh PFIs. The delay fueled speculation, allowing opportunistic price hikes across various depots.

Business

Naira Appreciates At Official Market

Published

1 month ago

May 24, 2025

Editor

The Naira, which has seen steady appreciation against the Dollar all week, closed stronger on Friday, trading at ₦1,580.44 in the official forex market.

Data from the Central Bank of Nigeria’s website show the Naira gained ₦4.51k against the Dollar on Friday alone.

This marks a 0.28 per cent appreciation from Thursday’s closing rate of ₦1,584.95 in the official foreign exchange window.

The local currency maintained consistent strength throughout the week, recording gains daily.

On Monday, May 19, it traded at ₦1,598.68; on Tuesday, at ₦1,590.45; and on Wednesday, at ₦1,584.49.

These gains suggest increased investor confidence and improved forex supply, contributing to the naira’s performance.

Meanwhile, the CBN, at its 300th Monetary Policy Committee meeting held Monday and Tuesday, retained the Monetary Policy Rate at 27.5 per cent.

Business

BREAKING: Again, Dangote Refinery Cuts Petrol Price

Published

1 month ago

May 22, 2025

Editor

The Dangote Petroleum Refinery has announced a nationwide reduction in the pump price of Premium Motor Spirit (PMS), commonly known as petrol, with new prices now ranging between ₦875 and ₦905 per litre, depending on location.

The ₦15 per litre cut applies across all regions and partner fuel stations, and was confirmed via an official announcement posted on Dangote Refinery’s social media channels on Thursday.

Major marketers participating in the new pricing regime include MRS, Ardova, Heyden, Optima Energy, Techno Oil, and Hyde Energy — partners in the distribution of Dangote-refined products.

Under the previous pricing structure, Lagos residents paid ₦890 per litre, while prices reached ₦920 in the North-East and South-South regions. With the latest adjustment, Lagos now pays ₦875 per litre, while the North-East and South-South will see prices drop to ₦905.

A regional breakdown of the revised prices is as follows: Lagos: ₦875, South-West: ₦885, North-West & Central: ₦895, North-East & South-South: ₦905 and South-East: ₦905.

In its announcement, Dangote Refinery encouraged consumers to purchase fuel only from authorised partner stations and urged the public to report any cases of non-compliance via its official hotlines: +234 707 470 2099 and +234 707 470 2100.

“Our quality petrol and diesel are refined for better engine performance and are environmentally friendly,” the company said.