Marketer’s Insist Fuel subsidy is back through back doorIn the ongoing developments, oil marketers in Nigeria are challenging the government’s assertion that there is no fuel subsidy. They argue that the current petrol price, ranging from N580 to N617 per liter, should be much higher, around N800 per liter, if no subsidy exists.
This comes in response to the government’s denial of reintroducing the subsidy and attributing long queues at petrol stations to distribution issues rather than a lack of supply.The marketers vehemently insist that the subsidy has returned, pointing to the significant increase in the exchange rate as a key factor.
They argue that the government is effectively subsidizing the cost of petrol despite its claims to the contrary.
The situation has dire consequences for the downstream sector, particularly independent marketers, who struggle to compete due to high diesel costs. This could lead to fuel scarcity in many areas, especially those without major operators with tank farms.The oil marketers believe that unless the government stabilizes the foreign exchange market and addresses the subsidy issue, the price of a liter of fuel may soon exceed N800.In response, the government’s regulatory authority, the Nigerian Midstream and Downstream Petroleum Regulatory Authority, has disclosed that fuel subsidy costs the government around N4.8tn annually, significantly impacting its fiscal viability.
In summary, this ongoing dispute between the government and oil marketers over the existence of fuel subsidies and their implications underscores a complex and contentious issue in the Nigerian energy sector.
The marketers argue that the government is indirectly subsidizing petrol due to economic factors, while the government insists otherwise. The financial burden of this subsidy is substantial and poses challenges to the government’s fiscal responsibilities.