The Independent Petroleum Marketers Association of Nigeria (IPMAN) has warned that the country’s fuel subsidy expenditure may exceed N700 billion monthly. Mohammed Shuaibu, IPMAN’s Secretary for Abuja-Suleja, made this statement in response to data released by the Major Energies Marketers Association of Nigeria, which showed that the landing cost of petrol was N1,117/liter as of the previous day.
Shuaibu expressed concerns that the Nigerian National Petroleum Company Limited (NNPC) and the government may not be transparent about the true cost of fuel subsidies. He stated, “Petrol price is determined by the forces of demand and supply in the international market. When there is a global price increase, we should experience it in Nigeria.”
He further explained that the NNPC, as the sole importer of petrol, is not telling the truth about the landing cost. “Data sourced by our counterparts, the major marketers, showed clearly that the landing cost of petrol is above N1,100/liter. This means that the monthly subsidy has crossed N700bn.”
Shuaibu warned Nigerians to prepare for potential fuel price hikes, saying, “That also means we should be prepared so that any time the price of petrol jumps, we should not be surprised because they have already told us.”
However, the Minister of State for Petroleum Resources, Heineken Lokpobiri, has maintained that fuel subsidies have been removed in Nigeria. Despite this, analysis shows that the ex-depot price of petrol by NNPC is N585/liter, which is significantly lower than the landing cost of N1,117/liter.
This discrepancy suggests that the government may be paying a subsidy of N532 per liter, which translates to a daily subsidy spending of N23.57 billion, based on petroleum consumption figures of 44.3 million liters in October 2023. Over a 30-day period, this amounts to over N700 billion in fuel subsidies.
