Oil marketers under the aegis of the Major Oil Marketers Association has hinted subsidy increase as the landing cost of petrol rises to N278.
This was occassioned by the rise in price of crude oil in the international market to $80 shortly on Tuesday, making experts to worry that subsidy payments would increase.
The international crude oil benchmark traded at $80.02 per barrel, its highest since October 2018, as of 12:09pm Nigerian time on Tuesday according to Oilprice.com. Brent had fallen to $78.89 per barrel as of 7:14pm on Tuesday, while the United States West Texas Intermediate traded 0.45 per cent lower at $75.11 per barrel.
The executive secretary and chief executive officer of MOMAN, on a phone call with our correspondent, said, “The last time we checked in September, the spot price if we assume an exchange rate of N410 per $, you have a landing cost price of N278 per litre.
“The truth is for as long as we continue to subsidise the price of fuel, we are borrowing money to consume. This means we are selling short the future generations. We need to adopt mass transportation to cut the per capita consumption of fuel and also reduce our dependence on importation to reduce the stress on the naira.”
Analysis revealed that subsidy payments on petrol had amounted to N905.27bn in eight months from the Nigerian National Petroleum Corporation’s data. Nigeria fell short of its August quota set by the Organisation of Petroleum Exporting Countries and its allies.
This has raised concerns about double stress on the country’s finances from the angle of increased subsidy payments without a corresponding increase in crude oil earnings.