Daud Olatunji
The National President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Festus Osifo, has disclosed that the Federal Government is still providing subsidies for petroleum, contrary to President Bola Tinubu’s earlier declaration that the subsidy era had come to an end, resulting in a surge in petrol prices across the nation.
In a recent interview on Channels Television’s “Politics Today,” Osifo, who is also the President of the Trade Union Congress (TUC), cited the rising cost of crude oil in the international market and the fluctuating exchange rate between the dollar and the naira as reasons for the government’s continued subsidy payments.
“They [the government] are paying subsidy today,” he affirmed.
“In reality today, there is subsidy because when the earlier price was determined, the price of crude oil in the international market was approximately $80 per barrel. But today, it has increased to about $93 to $94 per barrel for Brent crude.
Therefore, because of this increase, the price of petroleum also needed to adjust,” explained the PENGASSAN leader.
According to Osifo, two critical conditions must be met for the government to halt the subsidy on petroleum.
“The only reason the price will not change is when you can effectively manage your exchange rate and boost supply to stabilize the exchange rate,” he emphasized.
“So, if the exchange rate improves today, we would not be paying subsidy. However, with the current exchange rate and the international crude oil prices, we have reintroduced subsidy.”
The fuel subsidy had been a long-standing policy that kept petrol prices artificially low, providing many Nigerians with a perceived benefit from the government.
However, it also cost the country billions annually, given that Nigeria, despite being a major petroleum producer, imports most of its fuel due to a lack of domestic refineries.
President Tinubu acknowledged the hardships faced by Nigerians following the removal of the subsidy but announced measures in July to mitigate its impacts.
He pledged at least $264 million for the agriculture sector, $165 million for small and medium-sized businesses, and $99 million for the manufacturing sector.
“In the short and immediate terms, we will ensure staple foods are available and affordable,” President Tinubu assured.
“To this end, I have ordered the release of 200,000 metric tonnes of grains from strategic reserves to households.” The debate over petrol subsidies continues to be a significant issue in Nigeria, affecting the lives of millions of citizens.
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