For many Nigerians, it is double jeopardy; the Federal Government pays huge subsidy daily on refined petroleum products yet they buy fuel above the recommended retail price of N87 per litre. OLATUNDE DODONDAWA examines why both the government and consumers have to subsidise petroleum product marketers.
The decision of the present government to sustain fuel subsidy was greeted with mixed feelings by Nigerians. Many have argued that the country lacks the financial strength to sustain such payment which runs to about N4 billion daily on both premium motor spirit (PMS), otherwise called petrol and HouseHold Kerosene (HHK). As of today, subsidy on petrol is N1.7billion per day and subsidy on kerosene is N2.3billion per day.
After a prolonged silence by the Federal Government on subsidy policy, President Muhammadu Buhari approved issuance of import licence to some marketers signaling the continuation of the subsidy regime in the downstream sub-sector of the economy.
Few weeks to the general election and weeks after the inauguration of the new administration on May 29, 2015, due to acute fuel scarcity that almost shut down the economy, Nigerians were buying a litre of petrol for as high as N250 in some states.
Currently, only filling stations belonging to Major Oil Marketers Association of Nigeria (MOMAN) with a few exceptions sell petrol at N87 per litre. Such stations are always bombarded by motorists, resulting in long queues thus forcing many Nigerians to patronize filling stations that sell at between N100-N150 per litre but with no queues.