Marketers disclose FG pays N600bn monthly on subsidy as Dangote rolls out cheaper fuel

Rainoil Limited MD Gabriel Ogbechie has claimed that the Nigerian government resumed the controversial petrol subsidy payment following the naira devaluation in the forex market.

The Rainoil boss disclosed this on Tuesday, April 16, 2024, during the Stanbic IBTC Energy and Infrastructure Breakfast Session in Lagos.

Dangote refinery gives date to begin sale of fuel as more crude oil arrives from us for production Vanguard reported that Ogbechie pointed out that Nigerians consume about 40 million litres of petrol daily.

With the exchange rate at N1,300 per dollar, the government subsidy per litre is between N400 and N500, leading to a monthly subsidy payment of N600 billion.

He said: “When Mr President came in May last year, one of the things he said was that subsidy the subsidy was gone. And truly, the subsidy was gone because the fuel price moved from 200 to 500 per litre immediately. At that point, the subsidy was gone.

“During that period, the dollar was exchanged for N460, but a few weeks later, the government devalued the exchange rate, and the dollar moved to about N750. At that point, the subsidy was beginning to come back.

“The moment the two markets officially closed, the market went to about N1,300. At that point, that conversation was out of the window. Subsidy was fully back on petrol. If you want to know where petrol should be, look at where diesel is. Diesel is about N1,300, and gasoline is still sold for N600."

Marketers adjust pump price

According to him, the NNPC is still the country's sole importer of petrol, implying an ongoing subsidy payment because the prices are still fixed, Daily Trust reported.

A previous report by Legit.ng says that marketers adjusted their pump prices from N660 and N640 to N620 per litre in some locations in Lagos following the naira’s appreciation against the dollar.

Also, Legit.ng's visits to some Nigerian National Petroleum Company Limited stations show the product is sold to motorists for around N580 per litre.

Marketers load diesel at Dangote refinery

Although NNPCL has not officially announced new petrol prices in the country, the adjustments noticed in some filling stations in Lagos are a sign of good news to come amid the high cost of living.

The development comes as Dangote Refinery began rolling out diesel to marketers at a reduced price. Marketers began lifting the product from the facility on Monday, April 15, 2024, promising to crash its retail price.

Dangote crashes diesel price

Legit.ng earlier reported that to boost Nigeria's internal economy, the $20 billion Dangote Petroleum Refinery had reduced the price of fuel by 16.6% to N1,000 per litre from N1,200 per litre.

For several months, the price of diesel was comparatively elevated, mainly because the product was imported from the worldwide market and the corresponding foreign exchange problem.

However, in a statement, the refinery announced a further reduction in the price of diesel from 1200 to 1,000 naira per litre.