Petrol subsidies in nigeria

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Petrol subsidies in nigeria

Under-recovery has been described as the losses that oil companies incur due to the difference between the subsidised price at which oil-marketing companies sell certain products and the price, which they should have received for meeting their cost of production.

Under-recovery or over-recovery in petroleum products import was introduced after the Federal Government scraped subsidy on PMS. Ibe Kachikwu, who claimed to have brought down PMS consumption from 50 million litres a day to about 28 million litres per day in The Guardian learnt that the same forces the minister claimed have been tackled have returned and are now diverting petrol from Nigeria to neighbouring countries.

This means half of the petrol being imported into the country finds its way into neighbouring states. Specifically, a breakdown of the monthly under-recovery suffered Petrol subsidies in nigeria NNPC showed that the country incurred under-recovery of N This automatically translates to under-recovery of N60 per litre.

Kachikwu had adopted the price modulation policy for products, to ensure the price of petrol reflects the price of crude oil in the international market as close as possible. But rather than the price of petrol reflecting the increasing international crude oil prices, NNPC has taken responsibility in ensuring PMS price remains at N by paying subsidy.

NNPC Group Managing Director, Maikanti Baru, had attributed the heavy cost of subsidy to the sale of petrol at N per litre, which under the new policy is described as under-recovery, and proliferation of filling stations in communities with coastal borders across the country.

Why removal of fuel subsidy will help Nigerians – Tinubu - Premium Times Nigeria

He explained that because of the low price of petrol in Nigeria, as compared to prices per litre within West African countries around her, smugglers are taking advantage of this to divert loaded tankers of products from their destinations in-country to service stations at border towns, supplying countries like Niger, Ghana and Benin Republic.

This, he said, would put a stop to the revenue on importation of petroleum products. We have domestic needs here. A lot of investors will be frustrated when the contractual period is too long.

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We have been talking about modular refineries for a long time, but none has started, despite being given licenses.

Ojameruaye, said the price modulation of petroleum is not synonymous with removal of subsidy. Government can modulate prices in a way that retains small amount of subsidy or taxes or removes subsidy.

It depends on the import prices of petroleum products. If import price is low, the government may decide to reduce or retain the pump price while imposing a small tax, so that the pump price will be greater than the Expected Open Market Price and provide a small subsidy.

Abiodun Adesanya, emphasised the need for the country to refine its crude oil rather than export it. So, rather than producing crude oil and exporting it for dollars, we should refine it at our refineries and then sell the petrol through export.

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We should stop people from using firewood, which will have a multiplier effect on the economy. We should use oil and gas revenue to set up petrochemical industries, so that by the time oil is no longer relevant, just like coal, we will have something to fall back to.

Our refineries need to work.Nigeria’s government has announced the removal of a fuel subsidy, meaning that petrol prices are to rise by 66 percent, in a decision that has provoked mixed responses.

A similar decision to.

Petrol subsidies in nigeria

Why petrol subsidy removal is a gift to Nigerians -CSO. “Nigeria in the last five years has consistently spent over 1 trillion naira that is about $5b USD annually on petrol subsidies, same.

Petrol subsidies in Nigeria Nigeria, an oil-abundant nation, produces two million of barrels of crude oil a day, though despite this, it relies solely on .

Why petrol subsidy removal is a gift to Nigerians -CSO - Vanguard News

Energy is necessary for creating the conditions for economic growth. It is impossible to operate a factory, run a shop, grow crops or deliver goods to consumers without using some form of energy. Why removal of fuel subsidy will help Nigerians – Tinubu. May 20, decision of President Muhammadu Buhari’s government to discontinue fixing the price of petrol.

of Universities in Nigeria;. Sep 20,  · Nigeria’s petrol price is the sixth cheapest among OPEC countries. According to International Energy Agency (IEA), OPEC countries spent more than $ billion on fossil fuel subsidies between and to make the product more affordable for their countrymen.

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