The landing cost of Premium Motor Spirit, also known as petrol, was N1,117/litre as of Tuesday, July 16, 2024, the Major Energies Marketers Association of Nigeria (MEMAN) announced on Wednesday.
MEMAN disclosed this during a webinar with journalists on Wednesday.
The association revealed that the landing cost of diesel was N1,157/litre, while that of aviation fuel was N1,127/litre.
Chronicle NG reports that the N1,117 landing cost of petrol is far above the pump price of the product in Nigeria.
At the moment, filling stations operated by the Nigerian National Petroleum Company Limited (NNPCL) and those of the major marketers sell PMS at between N617/litre and N660/litre, while independent marketers sell for N700/litre or more.
NNPC, the sole importer of petrol into Nigeria, has consistently denied subsidising the cost of PMS but refused to disclose the landing cost of the product.
Our correspondent reports that the revelation from MEMAN is almost the first from marketers in the industry as the landing cost appears to have been shrouded in secrecy by the importer of PMS.
MEMAN’s Executive Secretary, Clement Isong, said the costs were obtained from independent energy price benchmark providers.
The association maintained that it would release similar information regularly to keep the masses informed.
Recently, independent oil marketers accused private depot owners of hiking the ex-depot price of petrol from N630 to N720/litre.
An expert in the energy sector, Prof Wumi Iledare, told our correspondent in an interview that the cost of PMS in Nigeria was far below the international price, considering the price of diesel.
“The gap between the cost of diesel and petrol in Nigeria is much. It is never like that all over the world. That means something is wrong.
“I don’t know if NNPCL is paying subsidies or not, but somebody is absorbing the difference. You can call it under-recovery or subsidy, but the price of petrol today does not reflect the market cost of producing a litre of petrol,” he disclosed.
Iledare added that with the current exchange rate, the price of petrol should not be less than 80 per cent of the price of diesel.
Corroborating this, a Professor of Economics at the University of Ibadan and President of the Nigerian Economics Society, Adeola Adenikinju, said, “The current price of PMS is being subsidised by the government. The government buys at higher rates and sells to us at subsidised rates. That is what they call under-recovery.”
The International Monetary Fund (IMF) recently warned the Nigerian government to remove what it called implicit petrol and electricity subsidies.
In a report published recently by the IMF, the organisation told Nigeria that the subsidies would guzzle three per cent of the nation’s Gross Domestic Product in 2024 as against one per cent in the year before.
President Bola Tinubu declared the removal of fuel subsidies during his inauguration on May 29, 2023.
IMF noted, however, that “adequate compensatory measures for the poor were not scaled up promptly and subsequently paused over corruption concerns. Capping pump prices below cost reintroduced implicit subsidies by end-2023 to help Nigerians cope with high inflation and exchange rate depreciation.”
However, the NNPCL and the Federal Government have vehemently denied subsidising the current price of PMS.
