Despite announcing the removal of subsidy on petrol and more than 400 per cent subsequent rise in the price, the Federal Government may be secretly paying an unspecified amount to marketers of the product to maintain the current pump price.
President Bola Tinubu had during his inaugural speech on Monday, May 29, 2023, announced that the era of subsidy payment on Premium Motor Spirit, otherwise known as petrol, was over. This announcement led to an instant rise in the pump price of the commodity from N189 to about N500.
Presently, petrol sells for between N568 and N617 in different parts of the country due to what government officials and the NNPC Limited described as foreign exchange fluctuations as the product is exclusively being imported.
The ex-depot price of petrol stood at N580 per litre in Lagos on Thursday and that after adding the cost of conveying it to filling stations and the marketers’ profit margin, it ought to sell for between N620 and N630 per litre. The difference, however, represents the subsidy that the government is surreptitiously bearing despite the fact that there is no budget for that.
It was learnt that jolted by the negative reactions that had been trailing its economic policies, including the astronomical surge in the cost of living occasioned by the removal of fuel subsidy and the floating of the naira, coupled with a possible backlash if the pump price of petrol rose further, the Tinubu administration decided to peg the price at the current rates and instead opted to accommodate some form of subsidy.