Oil marketers are challenging the Federal Government’s stance on the pricing of Premium Motor Spirit (PMS), commonly known as petrol, as they assert that the current pump price should exceed N800 per litre if there were no subsidies in place. Presently, petrol is retailing between N580 and N617 per litre in different areas, with the government insisting there is no PMS subsidy.

The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, recently refuted the existence of petrol subsidies, attributing queues at petrol stations to distribution issues. Oil marketers, however, insist that the removal of subsidies when the exchange rate was N700 to a dollar, coupled with the current exchange rate exceeding N1,000 to a dollar, indicates ongoing subsidization.

The Independent Petroleum Marketers Association of Nigeria’s National Secretary, Chief John Kekeocha, criticized the government for not being transparent about the situation. Kekeocha highlighted the negative impact on the downstream sector, warning of potential product scarcity.

He suggested that reviving the country’s refineries is a solution, as importing fuel and diesel at current exchange rates increases costs. Independent marketers, who operate the majority of filling stations, are struggling due to high diesel costs and forex challenges.

Oil industry experts believe that only a return to subsidy can maintain the current fuel price, but this may not be a sustainable solution. The government has stated that fuel subsidies are costing approximately N4.8 trillion annually and are hindering fiscal stability and the growth of the downstream sector. The Nigerian Midstream and Downstream Petroleum Regulatory Authority’s CEO, Farouk Ahmed, emphasized the unsustainability of PMS subsidies and the need for their cessation, which has been in place since the 1970s.