By KEMI KASUMU
Although Federal Government of Nigeria is yet to confirm the last media report that it paid subsidy for the month of August, despite inauguration speech pronouncement of President Bola Ahmed Tinubu where he said the era of fuel subsidy was gone, a labour leader did the confirmation on Friday.
Confirming this was the National President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Mr. Festus Osifo, who said the Federal Government is still paying subsidy on P. Motor Spirit (PMS) otherwise called petrol.
The DEFENDER reports that President Tinubu’s declaration of fuel subsidy removal in his first official statement as leader of Africa’s most populous country on May 29 had triggered an over 100 percent increase in cost of the commodity across the nation from pump price per litre of N184/N185 left behind by his predecessor, President Muhammadu Buhari.
But months after the move, Osifo, who is also the president of the Trade Union Congress (TUC), said due to the cost of crude oil in the international market and the dollar to naira rate, the government still pays subsidy for the product.
Within Tinubu’s first 60 days in office, the essential commodity’s price had increased for three times first from N500, to N560 and now N620 depending on part of the country of landing.
Speaking on Channels Television’s Politics Today Friday night, the labour leader said, “They (government) are paying subsidy today.”
Osifo said, “In reality today, there is subsidy because as of when the earlier price was determined, the price of crude in the international market was somewhere around $80 for a barrel.
“But today, it has moved to about $93/94 per barrel for Brent crude. So, because it has moved, then the price [of petroleum] also needed to move,” the PENGASSAN boss added.
For the government to stop subsidising petroleum, he said two things must happen.
“The only reason the price will not move is when you are able to manage your exchange rate effectively and you are able to pump in supply and bring down the exchange rate,” Osifo maintained.
“So, if the exchange rate comes down today, we will not be paying subsidy. But with the exchange rate value and the price of crude oil in the international market, we have introduced subsidy.”
President Bola Tinubu during a national broadcast on Sunday October 1, 2023.
The fuel subsidy had been in place for decades and kept petrol prices artificially low in what was seen by many Nigerians as one of their benefits from the government.
However, the measure costs the country billions annually because although Nigeria is a major petroleum producer, it imports most of its fuel needs due to its lack of refineries.
President Tinubu acknowledged the challenges facing Nigerians in the wake of the subsidy removal but in July rolled out measures to cushion the impacts.
To “reduce the burden”, he pledged at least $264 million for agriculture, $165 million for small and medium-sized businesses, and $99 million for manufacturing.
“In the short and immediate terms, we will ensure staple foods are available and affordable,” he said.
“To this end, I have ordered the release of 200,000 metric tonnes of grains from strategic reserves to households,” Tinubu added.
