The Federal Government may spend approximately N236 billion monthly to subsidise the Premium Motor Spirit (PMS), commonly known as petrol, sourced from both the Nigerian National Petroleum Company (NNPC) imports and the Dangote Refinery. This revelation comes amid calls for the complete removal of the fuel subsidy by prominent voices, including Aliko Dangote, chairman of the Dangote Group.
According to major marketers, NNPC has been selling petrol from the Dangote refinery at a subsidised rate of N766 per litre, despite purchasing it at N898 per litre, effectively subsidising each litre by N132. With Dangote pumping 25 million litres of PMS into the market daily, the government shoulders a daily subsidy burden of N3.3 billion.
For imported petrol, which remains necessary to meet the nation’s consumption demand of 45.7 million litres daily, the landing cost per litre stands at N1,117. NNPC sells the product to marketers at N895 per litre, subsidising it by N222 per litre. This translates to an additional daily subsidy cost of N4.59 billion for 20.7 million litres of imported petrol.
Aliko Dangote, in a recent interview, reiterated the need for the government to eliminate fuel subsidies entirely, stressing that it bloats costs and burdens the economy. He emphasized that removing the subsidy will help reveal Nigeria’s actual petrol consumption figures and reduce smuggling.
