The Nigerian National Petroleum Company Limited (NNPCL) as refuted a news report of its clash with oil marketers over fuel subsidy payment, stating that the government has stopped the payment of subsidies on petrol.
President Bola Tinubu, during his swearing-in on May 29 2023, had announced the immediate removal of petrol subsidy in Nigeria. This, however, led to an increase in the pump price of the product, from N195 to over N600 per litre.
Reacting to a media report which indicated a clash between the NNPC and the oil marketers over continued payment of fuel subsidy, Olufemi Soneye, the chief corporate communications officer, of NNPCL, said that subsidy has been entirely removed.
He said, “NNPC Ltd emphasises it has not clashed with any party. The publication to this effect sought confirmation on the alleged subsidy reduction, to which NNPC responded that the subsidy has been entirely removed.”
This is as several organisations, including the World Bank, maintained that selling petrol below N700 per litre showed that the product was still being subsidised by the government.
For example, Alex Sienaert, a lead economist for the World Bank recently stated that the Federal Government may still be paying for fuel subsidies, considering that fuel prices are not cost-reflective in the country.
According to him, the prices of petrol are not fully adjusting to market conditions so that hints at the partial return of the subsidy. He added that with a cost-reflective tariff, the price of petrol should be around N750 per litre as against the N600 currently paid by Nigerians.
