NEWS
Why Tinubu ‘Sneaked-In’ Subsidy On Petrol
It would appear that an interplay of market forces, business interests, political pressure and harsh economic realities have forced the hand of the Nigerian Government to reintroduce subsidy on Premium Motor Spirit, known along the streets as petrol, albeit secretly.
Reliable media sources, reported that the President Bola Ahmed Tinubu administration paid N169.4bn subsidy in August, 2023.
Citing documents from the Federal Account Allocation Committee (FAAC), the report revealed that the subsidy was funded from dividends paid by the Nigerian Liquefied Natural Gas (NLNG) to the Nigerian National Petroleum Company Limited (NNPCL), which amounted to $275m.
It was gathered that the NNPCL expended $220m (N169.4bn at N770/$) out of the $275m to pay for the PMS subsidy in the month of August.
In addition, The Punch cites the National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, thus, “I told you earlier that there is no way that the government will sustain the price of petrol at N617/litre without paying subsidy on it, going by the continued fall of the naira.
“The dollar is almost N990 at the parallel market currently, and you can see the effect of this on the pump price of diesel. Diesel is close to N1,000/litre, so the retail price of PMS should be around N890 to N900/litre.
“Therefore, it is better the government assists the masses by paying subsidy. From our records, in the United States, the super product or petrol is sold around $3.9, which is close to about N3,000/litre.
“The premium product is sold at about $2.89, which is over N2,000/litre. And if you check in other African countries you will find out that the product is being sold at between N1,200 and N1,500. But going by the forex rate in Nigeria, it should be around N900/litre.”
Biztellers gathered that aside market forces (local and global), scarcity of forex, fragile economic underbelly and a ready-to-explode civil society and labour elements sent jitters to government quarters, thereby compelling a reintroduction of the subsidy regime.
According to dealers in the downstream oil sector, the cost of crude oil and the exchange rate of the naira-dollar accounted for over 80 percent of the cost of PMS.
For instance, the global benchmark for oil, Brent crude, rose to about $95/barrel on Thursday.
It had peaked to $97/barrel the preceding day, which was the highest figure in 2023.
Recall that oil had started the year at about $82/barrel, dipped to $70/barrel in June, but traded above $94/barrel in the past week.
It is noteworthy that the naira continued its downward trend after exchanging to the dollar at 980 on the parallel market on Wednesday.
And this is just seven days after the naira was exchanged to the dollar at 950/$.
Oil Marketers maintained that forex crisis and the recent rise in crude price, had made it impossible for petrol price to still remain at N617/litre.
According to them, the FG had quietly reintroduced fuel subsidy.
Biztellers findings show that the subsidised ex-depot price of petrol as sold by NNPCL, was between N585 and N600 depending on area of purchase.
By subtracting the ex-depot cost of N600/litre from the projected unsubsidised rate of N890/litre, that the government may have been spending about N290/litre as subsidy currently.
Data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) showed that between June 1 to June 28, 2023, which was described as the post-deregulation period, the total petrol consumption across the country stood at 1.36 billion litres, while the average daily consumption was 48.43 million litres.
With an average daily consumption of 48.43 million litres and an estimated subsidy of N290/litre, the government could be incurring N14.04bn as subsidy daily, while this could rise to N421.3bn monthly.
This has the potential of rising to as high as N1.68tn for the months of September, October, November and December 2023, should the naira continues its fall against the dollar and crude price maintains its upward surge.
In a shocking incident on Sunday morning, unknown gunmen suspected to be kidnappers invaded the home of Alhaji Auwal, a prominent businessman, in Garo Town, Kabo Local Government Area of Kano State.
The gunmen, estimated to be around 10 in number, forced their way into the residence, breaking down a door to gain entry.
An anonymous source revealed that the attackers were heavily armed, with three carrying firearms and the rest wielding other weapons.
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They quickly gathered the entire family in one room, instilling fear and panic in the household.
According to the source, Alhaji Auwal pleaded with the assailants to spare his family and agreed to meet their demands.
The kidnappers, who were determined to extort money, received ₦8 million from the family.
Despite this payment, the gunmen took the businessman’s eldest daughter, Zainab, a secondary school graduate, before fleeing the scene.
The whereabouts of Zainab remain unknown, and as of now, the kidnappers have not contacted the family.
This abduction comes just 48 hours after the tragic kidnapping and subsequent murder of former Gombe State Permanent Secretary, Atiku Mu’azu, who was killed by gunmen after a ₦10 million ransom was paid.
The two incidents have left the residents of Kano in shock and fear, prompting calls for increased security measures in the area.
Attempts to reach the spokesperson for the Kano Police Command, SP Abdullahi Haruna, for comment were unsuccessful as his phone remained unreachable.
Authorities have yet to make any official statements regarding the investigation.
In a bold move, Colombian President Gustavo Petro declared on Sunday that he would not allow US deportation flights carrying Colombian migrants to access his country’s airspace.
The left-wing leader took to X (formerly Twitter) to express his strong stance, stating, “The United States cannot treat Colombian migrants as criminals. I forbid entry to our territory to US planes carrying Colombian migrants.”
Petro made it clear that such flights would only be accepted once Washington established a protocol to ensure the “dignified treatment” of deported migrants.
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The president later confirmed in a separate post that he had already turned back US military planes that were en route with Colombian migrants on board, although he did not provide further specifics on the matter.
While AFP sought confirmation from US authorities regarding the blockade of deportation flights, no immediate response was forthcoming.
Petro’s statements come just a day after Brazil’s government voiced similar outrage over the treatment of deported Brazilians.
Brazil condemned the US administration under President Donald Trump, citing instances where Brazilian migrants were deported while handcuffed on flights, describing it as a “flagrant disregard” for their basic rights.
In his remarks, Petro emphasized that he would be open to allowing civilian US flights to transport deported migrants as long as they were not subjected to treatment “like criminals,” signaling a broader call for humane treatment of migrants under international deportation policies.
An explosion at a mining site in Sabon Pegi, Mashegun Local Government Area of Niger State, claimed the lives of four individuals and left several others injured on Sunday morning.
The blast occurred as miners resumed operations, sending shockwaves through the community.
While the exact cause of the explosion remains undetermined, local residents have pointed to the poor handling of explosive devices by mining companies as a possible factor.
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The incident has sparked concerns about safety practices within the mining sector.
Community sources confirmed the recovery of four bodies, but authorities fear the death toll could rise.
Investigations are ongoing to establish the cause of the blast and assess the full extent of the damage.
One resident, Aminu, described the chaos that followed the explosion. “The sound was so loud that many of us thought it came from the hydroelectricity dam nearby. People panicked and ran into the bush for safety,” he recounted.
Another community member highlighted the potential role of mining operations in the tragedy.
“Mining companies here frequently use explosives during their activities, and this seems like an operational issue, not something related to terrorism,” the resident said, dismissing concerns about a security threat in the area.
As of the time of reporting, neither the state government nor security agencies have released an official statement regarding the explosion.
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