The Major Energies Marketers Association of Nigeria (MEMAN) announced on Wednesday that the landing cost of Premium Motor Spirit (PMS), also known as petrol, reached N1,117 per litre as of Tuesday, July 16, 2024. This disclosure was made during a webinar with journalists.
In addition to petrol, MEMAN reported that the landing cost of diesel was N1,157 per litre, and aviation fuel stood at N1,127 per litre.
This revelation highlights a significant discrepancy, as the current pump price of petrol in Nigeria ranges between N617 and N660 per litre at filling stations operated by the Nigerian National Petroleum Company Limited (NNPC) and major marketers. Independent marketers are selling petrol for N700 per litre or more.
Despite NNPC being the sole importer of petrol into Nigeria, it has consistently denied subsidising the cost of PMS and has not disclosed the landing cost of the product. The information from MEMAN marks one of the first disclosures from marketers regarding the landing costs, which have previously been kept confidential.
Clement Isong, MEMAN’s Executive Secretary, stated that these costs were sourced from independent energy price benchmark providers. He also mentioned that the association would continue to release such information regularly to keep the public informed.
Recently, independent oil marketers accused private depot owners of increasing the ex-depot price of petrol from N630 to N720 per litre.
Energy sector expert, Prof. Wumi Iledare, explained in an interview that the cost of PMS in Nigeria is significantly lower than the international price, especially when compared to the price of diesel. “The gap between the cost of diesel and petrol in Nigeria is much. It is never like that all over the world. That means something is wrong. I don’t know if NNPC is paying subsidies or not, but somebody is absorbing the difference. You can call it under-recovery or subsidy, but the price of petrol today does not reflect the market cost of producing a litre of petrol,” he stated.
Prof. Adeola Adenikinju, President of the Nigerian Economics Society, corroborated this view, asserting that the government is effectively subsidising the current price of PMS. “The current price of PMS is being subsidised by the government. The government buys at higher rates and sells to us at subsidised rates. That is what they call under-recovery,” he explained.
The International Monetary Fund (IMF) has recently warned the Nigerian government to eliminate implicit fuel and electricity subsidies, predicting that such subsidies would consume three percent of the nation’s Gross Domestic Product in 2024, up from one percent the previous year. Despite President Bola Tinubu’s declaration to remove fuel subsidies during his inauguration on May 29, 2023, the IMF noted that adequate compensatory measures for the poor were not promptly scaled up, leading to the reintroduction of implicit subsidies by the end of 2023 to help Nigerians cope with high inflation and exchange rate depreciation.
However, both the NNPC and the Federal Government have strongly denied subsidising the current price of PMS.
News Editor