- PMS prices expected to reach ₦320/ltr as FG moves to remove fuel subsidies
- Stakeholders expect a ripple effect on the cost of goods and services
In view of the implementation of the Petroleum Industry Act (PIA) and the plans of the Federal Government (FG) to put an end to petrol subsidies, there are several indications that the cost of Premium Motor Spirit (PMS) may reach as high as ₦320 per litre. The Nigerian National Petroleum Corporation (NNPC) disclosed that a total of ₦905.27 billion was spent on petrol subsidies in the last eight months.
The landing cost for refined crude in Nigeria is about ₦290 per litre; with additional charges, revenue margins for oil and gas marketers, it is expected that the price of petroleum products may reach ₦320/ltr. Investors in the Nigerian power sector are groaning over the rising cost of carrying on business due to the lack of a Cost-Reflective Tariff (CRT), rising inflation and fluctuating foreign exchange rates. The rise in global crude oil prices will result in a crisis with the sector largely dependent on fossil fuels for electricity generation.
Minister of State for Petroleum Resources, Timipre Sylva, last week confirmed that the government is in the process of fully deregulating the downstream oil and gas sector. ”The government is in the process of fully deregulating the downstream petroleum sector which will end subsidies and free up funds for national development, including investment in renewables which will be part of the energy mix that ultimately powers our economy,” Sylva said.