Friday, April 16, 2021 / 09:40
AM / by FDC Ltd / Header Image Credit: Orient Daily News
Over the weekend, the federal government decided to
delay the inevitable with respect to the deregulation of refined PMS.
This time around for 6 months, as it continues to
negotiate with the unions over the resultant impact on their workers.
The NNPC, which is the sole importer of refined PMS
into the country, spends about N120bn monthly on fuel subsidies, (N720bn for 6
This is because at current global oil prices, and
factoring in the exchange rate adjustment, the market price of fuel is estimated
at N212- N234/ltr compared to the retail price of N162-N165/ltr.
While there is an argument for the inflationary impact
of fuel subsidy removal on consumer prices, especially with the numerous
challenges facing the average Nigerian, the financial ramifications for the
government have become unbearable and unsustainable.
The government has a projected deficit financing need
of N5.5trn in 2021, which is projected to increase, as there was no provision
for fuel subsidies in the 2021 budget.
Kicking the can down the road only delays the
inevitable. It will be better for the government to bite the bullet now so the
adjustment process can kick in sooner than later.
- Average Prices of PMS, AGO, HHK and Cooking Gas - March 2021
- PMS Price: Between the Devil and the Deep Blue Sea
- PMS Price:
Between Subsidy and Survival
Prices of PMS, AGO, HHK and Cooking Gas - February 2021
Administrative Charges in the Nigerian Gas Market will Disincentivize
- Guiding PMS
Prices Was Only Indicative of Current Market Trends - PPPRA
- Nigeria and
Its Long-Standing Fuel Subsidies
Removal and Cost-Reflective Tariff: Tough Decisions to be Made
Increase in PMS Price, Stakeholders Call for Fixing of the Non-Functional
- How Much
Higher Can Oil Prices Go? - OIR 120221
- Impact of the
New Petroleum Industry Bill on Nigeria's Oil
Back to Subsidies
- Is PMS
Price Deregulation for Real or a Mirage?
- Petrol May
Sell at N168 as PPMC Increases Depot Rate to N155
- Petrol: An End to the Subsidy Regime?
Increases Ex-depot Price of PMS to N151.56 per Litre
Releases Advised Price for PMS for the Month of July 2020; Raises Pump
Price to N140
Removes Existing PMS Price Cap; Commences Market Based Pricing Regime
Conundrum in the Retail Pricing of PMS
- PPPRA Sets
New PMS Pump Price at N123.5 per litre Effective From April 1st 2020
of PMS Pump Prices Reduction and Introduction of a Price Modulation
in PMS - A Nod to the Deregulation of the Downstream Sector?