“NNPC removes fuel subsidy, assures no disputes with marketers.”
The Nigerian National Petroleum Company (NNPC) Limited has denied that it had a dispute with independent petrol marketers over an alleged subsidy on Premium Motor Spirit (PMS).
There have been reports of a clash between fuel marketers, who are part of the Independent Petroleum Marketers Association of Nigeria, and NNPC. The cause of the clash was the uncertainty surrounding whether the government was still paying fuel subsidy.
However, NNPC spokesman Olufemi Soneye has issued a statement saying that subsidy has been entirely removed on petrol.
He emphasized that NNPC has not clashed with any party and that the headline of the publication (not Channels Television) was unfortunate. The publication had sought confirmation on alleged subsidy reduction, to which NNPC responded that subsidy has been entirely removed.
In his inaugural speech on May 29, 2023, President Bola Tinubu declared that the subsidy era is gone. He stated that the 2023 budget did not include any provision for fuel subsidy, and that subsidy payment was no longer justifiable.
The recent declaration to remove fuel subsidy in several parts of the country resulted in an increase in petrol per litre from around N184 to over N600. This removal of subsidy led to economic crises, including a surge in food inflation to an all-time high. Additionally, oil marketers threatened to increase the price per litre of petrol due to fluctuating and scarce foreign exchange used to secure the essential commodity.
However, the implementation of subsidy removal has been controversial, with the World Bank claiming that the NNPC was not transparent about the financial gains from fuel subsidy removal and that the subsidy was not entirely gone. The Bretton Woods institution argued that the gains in net oil revenue of the federation were lower than what they should have been. Still, NNPC boss Mele Kyari defended the government, saying that the company was recovering the full cost from imported products.
