The Chief Executive Officer, CEO, and Managing Director of Pinnacle Oil and Gas Limited, Robert Dickerman, has revealed that the Nigerian Government still pays one trillion naira every month for petrol subsidy.
This is despite the total deregulation of petroleum products as announced by President Bola Tinubu on the day of his inauguration.
Pinnacle Oil has now said that Nigeria is currently spending approximately N1 trillion every month on petrol subsidies.
Dickerman revealed this information while participating in a panel discussion at session six of Nigeria’s Downstream Forum, at the recently concluded Nigeria International Energy Summit (NIES) in Abuja.
He mentioned that a significant subsidy is still in place, adding that this has contributed to the product’s affordable price and potentially fueling smuggling activities to nearby nations.
“Foreign investors, foreign lenders and government-run DFIs have been very clear about what they want to see: Conservative fiscal policy, tackling corruption, enabling competitive markets, and enforcement of fairness in markets through policy, regulation and the ability to enforce contracts. Keeping that context in mind, I want to point out that there is still a massive subsidy in PMS, albeit in the FX portion of PMS Price, not the global price in dollars.
“The consequences of this subsidy are: The cost of gasoline in Nigeria is the lowest in Africa by far, which encourages smuggling out, further depriving Nigeria of value.
“Smuggling causes Nigeria to subsidize neighboring countries even while our economy struggles. The cost is hurting the entire budget, Federal and State, as critical programs cannot be funded to pay this subsidy. It is currently calculated to be about 1 trillion Naira/month.
“Also, with this subsidy in place, ceasing subsidy payments would result in no petrol supply, if there are no refineries producing gasoline. All supplies come from the international market which will only sell at market prices.”