“Back to N200/litre”: Marketers Speak on Return of Subsidy as Petrol Landing Cost Hits New High

• In northern areas like Abuja, the cost of petrol has reached an unprecedented peak of N1,200 per litre
• Drivers are currently compelled to spend the night at gas stations, especially NNPC Ltd. locations, as a result of this
• This is made worse by the inaction of multiple government agencies tasked with making sure that petrol is supplied seamlessly

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.

While filling stations across the nation continue to struggle with severe shortages, it appears that the persistent fuel shortages have eluded all remedies.

The development has caused petrol prices to soar to an all-time high of N1,200 per liter in remote northern towns like Abuja.

Due to this trend, Daily Sun reported that drivers are now forced to spend the night at gas stations, particularly NNPC Ltd. outlets.

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The inaction of several government organizations in charge of ensuring the seamless supply and sale of petroleum products has exacerbated the problem.

The majority of filling stations in Lagos, particularly those run by independent marketers, are empty, and large marketers and NNPC are fighting to stabilize the situation with scant supply.

The majority of filling stations were closed on the weekend, and just a few majors were open, which made traffic in the city worse.

The circumstances are the same in Ikeja, Abule-Egba, Ojota, Ikorodu, Isolo, Surulere, Ikoyi, and Victoria Island.

Drivers in Abuja claimed that the price of a liter of petrol had increased to almost N990, with Point of Sale (PoS) operators profiting handsomely from the premium that drivers paid to purchase the fuel.

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Ademola Ogunsaye, a bus driver in Abuja said,

"Transport cost has become really high that passengers can now barely afford."

"In order to cut cost, some people have decided to remain indoor and only go out fir imorttant occassions."

Marketers react

Zarama Mustapha, the National Operations Controller at IPMAN, commented on the development and stated that policy inconsistency was still the main cause of the recurrent fuel shortages.

According to Mustapha, observers in the industry thought that the Petroleum Industry Act (PIA) would provide a long-term solution to the problems facing the business.

He claimed that despite the nation's ongoing fuel crisis, the PIA has not addressed the issues in the downstream industry.

According to him, the biggest issue with the ongoing fuel shortage is the extremely unstable foreign exchange market, which makes importing less profitable for marketers.

‘‘When the President announced an end to subsidies, marketers were happy, believing they could return to imports of products. At that time, the exchange rate was N720 per litre. Along the line, the Government floated the naira, and the exchange rate hit N1550.

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Currently, the retail price of a product at a NNPC retail outlet is N568; this implies that the government is absorbing a subsidy of N632. The landing cost of gasoline is N1,200.

He added:

“Now, we have a situation whereby people are calling for a return of subsidy, which will take fuel cost back to N200 per litre. If that happens, where will the government get the resources to absorb N1,000 per liter subsidy,’’?

Marketers addresses new fuel price at filling stations

Legit.ng earlier reported that the latest order from President Bola Tinubu for the Nigerian National Petroleum Company Limited (NNPC) to sell crude oil to Dangote Refinery and other refineries in naira instead of dollars was welcomed by fuel marketers in Nigeria.

Marketers anticipate that the move would result in lower gasoline costs across the country, which would help consumers and the economy.

The Dangote Refinery was the first to embrace the Federal Executive Council's (FEC) resolution to sell crude in naira.

Source: Legit.ng