The Chief Executive officer, CEO, Rainoil Limited, Gabriel Ogbechie, said the federal government now spends N600 billion on fuel subsidy monthly.
Jwreymusa.com reports that speaking at the Stanbic IBTC Energy and Infrastructure Breakfast Session in Lagos, Ogbechie stated that since the naira’s depreciation in the foreign currency (FX) market, the federal government has reinstated petrol subsidies.
He claimed that the government’s petrol subsidy is between N400 and N500 per litre, given the present daily consumption of 40 million litres and the foreign exchange rate of N1,300.
Fuel Price Always on The Increase
“One of the things Mr. President said when he came here last year is that subsidies are gone, and they really are gone because the price of fuel went from N200 per litre to N500 per litre right away,” the speaker added.
“At that point, the naira was officially worth between N450 and N470, therefore the subsidy was genuinely gone.
“However, a few weeks later, the exchange rates were combined, and the naira was officially valued at roughly N750. By then, the subsidies was starting to return.
“Again, we may argue over whether the exchange was N750, N500, or something else entirely based on the current currency rate.
“However, that conversation was thrown out the window when the CBN arrived and the market officially dropped to around N1300 at that point, after the two markets’ official closure in January of this year according to policy. Officially, petrol subsidies were in place.
“If you’re wondering where the gas should be located. Take a peek at Diesel’s location. While petrol sells for N600, diesel costs roughly N1300.
“I can thus tell you without a doubt that there is a subsidy of at least N400 or N500 per litre on petrol today.
“Considering that our daily consumption is, at best, 40 million litres per day at a cost of N500, that translates to at least N20 billion daily, N600 billion monthly, or N7.2 trillion depending on your point of view. Thus, petrol subsidies are undoubtedly returning.”
He claims that the fact that the Nigerian National Petroleum Company (NNPC) is the only importer of petrol in the nation is evidence of the subsidies’ continuous existence.
Nonetheless, in order to increase petroleum product self-sufficiency, he pleaded with the government to give modular refining first priority.