Business
More intrigues as IPMAN says petrol landing cost is over N1,200; Govt subsidizing by over N700
The Independent Petroleum Marketers Association of Nigeria (IPMAN) has again drawn attention to the issue of subsidy on petroleum products in Nigeria.
The body confirmed the return of fuel subsidy by disclosing that the landing cost per litre of Premium Motor Spirit (PMS) is over N1,200.
Yet, the Nigerian National Petroleum Company (NNPC) Limited sells to marketers at about ₦565 or so which indicates that there is a subsidy of almost ₦600 to ₦700 as of now.
The National Operations Controller, IPMAN, Zarama Mustapha, made this known on Channels Television’s Sunrise Daily programme on Thursday.
“Right now, the landing cost of PMS is over ₦1,200, without the margin of the marketers, transportation and other logistics.”
“NNPC sells to marketers at ₦565 or so. That means there is a subsidy of almost ₦600 to ₦700 as of now.
“Whether they (government officials) say there is subsidy or there is not subsidy, the fact on the ground clearly states that there is something they are under-recovering.”
READ ALSO:Fuel scarcity to last for another two weeks – IPMAN
The IPMAN official also blamed policy inconsistency for the frequent petrol queues in the country, saying about half of independent marketers are almost out of business because of the forex volatility.
He said petrol marketers spend more than three times the amount they used to purchase one tanker pre-subsidy removal.
“Looking at the need to be in business in the deregulation era, more than 50 or 60% of our members are almost out of business because of the capital involved. Once you cannot get the capital involved, you cannot sustain the business.
“For most of our members, what they used to buy one truck, they need about five or six times that value of capital to buy one truck today. Once you cannot get the capital involved, you cannot sustain the business.”
On the directive by the President that the NNPCL sell crude to Dangote Refinery and modular refineries in naira, the IPMAN official said, “It’s just the currency but whatever they are going to sell in naira is going to be calculated based on the FX rate.
“The point is that it will reduce the demand on the pressure on the naira. Naira will be chasing the dollar, obviously. So, the volume of demand of dollars is going to drastically reduce which will give some kind of value and appreciation to our currency.”
By: Babajide Okeowo
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