Federal Government Denies Reintroducing Fuel Subsidy Amid Closure Of Gas Stations Due To Price Hikes

The federal government denied reintroducing fuel subsidy on Monday as many gas stations across Nigeria continued to shut down due to increased fuel prices.

Nigerian National Petroleum Company Limited (NNPCL) said that if it weren't for President Bola Tinubu's removal of the fuel subsidy on Premium Motor Spirit (PMS), it would have gone bankrupt three months ago.

Mele Kyari, the group's chief executive officer, told the State House Correspondents at the Aso Rock Villa that the government was not reintroducing fuel subsidy.

NNPCL assured that Nigeria would be able to export refined petroleum products by 2024, as there were already efforts going on to revamp the refineries.

"We are recovering our full cost from the products that we import," Kyari said, as per Punch. "We sell to the market, and we understand why the marketers are unable to import. We hope that they do it very quickly and these are some of the interventions the government is doing. There is no subsidy."

The comments came two days after the Petroleum and Natural Gas Senior Staff Association (PENGASSAN) of Nigeria shared that the fuel subsidy had returned.

Oil marketers also kept sharing that the fuel subsidy had been reintroduced. They even claimed that while last week's petrol was priced at N720 per liter, it was being sold for N580 to N617 per liter, depending on the location.

Festus Osifo, national president of PENGASSAN, said the government was still paying the subsidy, noting that "in reality, today, there is a subsidy because, as of when the earlier price was determined, the price of crude in the international market was around $80 for a barrel."

"But today, it has moved to about $93/94 per barrel for Brent crude," Osifo added. "So, because it has moved, the price [of petroleum] also needed to move. The only reason the price will not move is when you can manage your exchange rate effectively and you can pump in supply and bring down the exchange rate."

He went on to explain that if the exchange rate went down, they would not need to pay the subsidy anymore. However, "with the exchange rate value and the price of crude oil in the international market, we have introduced subsidy."

Benneth Korie, president of the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA), revealed last week that many fuel depots in the country didn't have enough petrol. Hence, they were deserted or out of stock.

Tinubu announced the removal of the subsidy when he came into power in May. Almost one month later, the Nigerian leader admitted that the decision was painful for Nigerians. Despite this, he asked citizens to bear with him in order to provide a regular power supply, better health care, transport infrastructure and education.

The price of petrol was N195 per liter before fuel subsidy removal. It skyrocketed to N600 per liter following the announcement.