Petroleum marketers are facing difficulties as they struggle to comply with the demands of various industry stakeholders while keeping prices fixed.
The cost of crude oil has been steadily increasing, with Brent crude reaching $94 per barrel, the highest in 2023.
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A gas station attendant pumps fuel into a customer's car at the NNPC Mega petrol station in Abuja, Nigeria March 19, 2020. REUTERS/Afolabi Sotunde[/caption]
The Nigerian currency, the naira, has been depreciating against the United States dollar. This depreciation makes it more expensive to import crude oil and petroleum products, as most transactions are conducted in dollars.
According to oil marketers and experts in the downstream oil sector, the combined effect of higher crude oil prices and weaker naira accounts for over 80 per cent of the cost of PMS.
Although the Nigerian government and the Nigerian National Petroleum Corporation (NNPC) have claimed that fuel subsidies have ended due to deregulation, some operators argue that the government is still implementing a form of subsidy,
Punch reports.
They suggest that keeping the pump price of PMS at a fixed rate, such as N617 per litre, despite rising costs, amounts to a quasi-subsidy.
Some stakeholders believe that the Nigerian National Petroleum Corporation (NNPC), as the major importer of petroleum products, should be able to manage the situation for the benefit of Nigerians, especially with the higher prices of crude oil potentially increasing its revenue.
Industry players are calling for greater transparency from the government regarding fuel subsidies. Some argue that if subsidies are to be reintroduced, the government should openly declare its intentions and work to make the refineries functional.
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