The Nigerian National Petroleum Company Limited and Independent Petroleum Marketers Association of Nigeria members clashed on Tuesday, January 2, 2024, over petrol subsidy removal.
The development follows the naira crash against the US dollar in the official and parallel markets. The Naira closed at N988 per dollar at NAFEM and N1,225 on the black market on Tuesday, January 2, 20224. Based on the depreciating value of the naira, experts and oil marketers said the petrol subsidy was rising. Still, the NNPCL refuted the claim, stating that it was already recovering its total cost of petrol imports.
Meanwhile,Bismark Rewane, the CEO of Financial Derivatives Company, said that fuel subsidy was not removed but reduced.
Oil marketers stated that the subsidy on petrol was rising following the crash of the local currency against the US dollar and the cost of crude oil, saying that petrol should sell for N1,200 in the free market. Currently, petrol sells for N617 per litre and N660 per litre and is solely imported by the NNPCL. According to the Chief Corporate Communications Officer of NNPCL, Olufemi Soneye, the positions of the experts and marketers were mere assumptions, saying that the Nigerian government had ended subsidies on petrol.
He said, “At NNPC Ltd, we prioritize national development through energy security and sustainable growth. We reiterate that the Nigerian government does not pay subsidies on fuel; we recover total costs from our imported products.
“As a global energy company, we focus on fostering a vibrant and energy-secure Nigeria.”
The development comes as various refineries nationwide are about to begin production, with the Port Harcourt refinery undergoing a test run. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) ordered oil companies operating in Nigeria to supply about 483,000 barrels of crude oil daily to local refineries for the next six months beginning January 2024.
The initiative is part of Nigeria’s efforts to ensure regular supply to local refiners for domestic consumption.
