The Major Energies Marketers Association of Nigeria has announced that the landing cost of Premium Motor Spirit commonly known as petrol, reached N1,117 per litre as of Tuesday, July 16, 2024.
This information was disclosed during a webinar with journalists on Wednesday.
MEMAN also revealed that the landing cost for diesel was N1,157 per litre, while aviation fuel stood at N1,127 per litre.
According to The PUNCH, the landing cost of petrol significantly exceeds the current pump prices in Nigeria. Currently, filling stations run by the Nigerian National Petroleum Company Limited and major marketers are selling PMS between N617 and N660 per litre, while independent marketers are charging N700 per litre or more.
Despite being the sole importer of petrol in Nigeria, NNPC has repeatedly denied providing subsidies for PMS, and has not disclosed the landing cost of the product.
This revelation from MEMAN marks one of the few instances where marketers have provided such detailed information, as the landing cost has often been kept under wraps by PMS importers.
Clement Isong, MEMAN’s Executive Secretary, stated that these costs were sourced from independent energy price benchmark providers.
The association plans to regularly release similar information to keep the public informed.
Recently, independent oil marketers accused private depot owners of raising the ex-depot price of petrol from N630 to N720 per litre.
Energy sector expert, Prof. Wumi Iledare, remarked in an interview that the current cost of PMS in Nigeria is considerably lower than international prices, particularly when compared to 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,” Iledare explained.
He speculated that someone must be covering the cost difference, suggesting it could be considered under-recovery or a form of subsidy.
According to him, with the current exchange rate, the price of petrol should not be less than 80% of the price of diesel.
Supporting this view, an Economics professor at the University of Ibadan and President of the Nigerian Economics Society, Prof. Adeola Adenikinju, added, “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 recently urged the Nigerian government to eliminate what it termed implicit fuel and electricity subsidies. In a recent report, the IMF warned that these subsidies could consume three per cent of Nigeria’s Gross Domestic Product in 2024, up from one per cent the previous year.
President Bola Tinubu announced the removal of fuel subsidies during his inauguration on May 29, 2023.
However, the IMF noted that adequate compensatory measures for the poor were not promptly scaled up and were later paused due to corruption concerns. By the end of 2023, capping pump prices below cost effectively reintroduced implicit subsidies to help Nigerians manage high inflation and exchange rate depreciation.
Nonetheless, both the NNPC and the Federal Government have strongly denied subsidising the current price of PMS.
