FG Saves N400 Billion From Subsidy Removal in 4 Weeks as Marketers Speak on Petrol Price Hike
- The Nigerian government has saved about N400 billion by removing subsidy on petrol
- Independent marketers revealed that the subsidy removal had saved the federal government a lot of money
- The organization also alerted Nigerians that there may be petrol price hikes due to the fluctuating exchange rate in the country
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The Nigerian government had saved about N400 billion due to the removal of subsidies on petrol since May 31, 2023, when the policy became effective, according to oil marketers on Thursday, June 29, 2023.
Oil dealers said there was a high possibility for an increase in the price of petrol in July due to the recent naira float against the US dollar.
Source: AFP
Nigeria unifies exchange rates
The Central Bank of Nigeria announced unified exchange rates in Nigeria in the Investor's and Exporters' window on June 14m 2023, which allows forces to determine the exchange rate.
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Punch reports that operators in the downstream oil sector revealed that going by the revelation of Nigeria National Petroleum Company Limited (NNPC) regarding the amount spent earlier on subsidy monthly, Nigeria has now saved hundreds of billions after stopping the subsidy regime in May.
The national president of the Independent Petroleum Marketers Association of Nigeria, Chinedu Okonkwo, said that the government has been making money since subsidy the removal of subsidies.
Okonkwo said:
"This is because we know how much they lose every month."
He said marketers knew how much the NNPC spent on monthly subsidies.
Okonkwo said petrol imports by independent marketers were holding meetings on possible price increases.
He said:
"We are holding meetings with a lot of people who are interested in commencing PMS imports. We are not resting on our oars about this."
He said petrol prices would rise in response to foreign exchange rates because of subsidy removal.
Marketers alert Nigerians on price hike
He said deregulation means that prices would either go up or down because there is no subsidy.
"So the market fundamentals will determine the pricing and capping. Therefore the floating of the naira at this time that Nigeria is beginning to make savings is not going to be a fixed thing," Okonkwo said.
Sources at IPMAN told Legit.ng that the NNPC has run out of stock of petrol it imported when the subsidy was in force, stating that marketers are now left to import petrol, and this may lead to a hike in petrol prices to as much as N700 per litre.
"As it is now, marketers are running out of stocks given to them by NNPC. It means they are now going to look to import petrol, and given the volatility in the exchange rates, prices could be as high as N700 per litre pf petrol," the source said.
Marketers alert Nigerians on new petrol prices for North, and South regions as private companies begin importation
Legit.ng reported that the Independent Petroleum Marketers Association of Nigeria (IPMAN) has announced that Nigerians should expect the pump price of petrol to rise above N700 per litre, particularly in the Northern region starting from July.
Mike Osatuyi, the National Controller of IPMAN, disclosed this while telling residents of Lagos to expect petrol prices of around N610 per litre.
Punch reports that the new prices will take effect once independent marketers commence importing petroleum products.
Source: Legit.ng
