Current Price Of Petrol Without Subsidy: ₦142.92 Per Litre

Nigerians will pay N142.92 for a litre of petrol by January 1, 2012, if petrol prices remain at the present level when the subsidy on the product is withdrawn.

According to the pricing template posted on the website of the Petroleum Products Pricing Regulatory Agency, on Friday, a litre of petrol should have been selling currently at N142.92 as against the official price of N65.www.mannastores.com


Nigeria is currently consuming about 32 million litres of petrol daily for N65, while the expected price for the product is N142.92, which means government currently pays a subsidy of N77.92 per litre.

Although, the nation has a crude refining capacity of 445,000 barrels of crude oil per day, the refineries are comatose and the country depends largely on fuel importation to meet its domestic demand.

When the subsidy is finally withdrawn, analysts forecast that there will be rise in transport cost and inflation.

The Federal Government at the beginning of the year set aside N240bn in 2011 budget for oil subsidy in which N20bn was billed to be spent monthly.

However, by the end of the year, the Federal Government would have spent N1.2tn on fuel subsidy against the N240bn appropriated by the National Assembly.

President Goodluck Jonathan had, on Tuesday conveyed to the National Assembly the intention of his government to begin the removal of fuel subsidy next year. Jonathan disclosed this to the National Assembly in a letter conveying his administration’s Medium Term Expenditure Framework and a N4.8tn budget for the 2012 fiscal year.

The covering letter for the budget read in part, “A major component of the policy of fiscal consolidation is government’s intention to phase out the fuel subsidy, beginning from the 2012 fiscal year.

“This will free up about N1.2tn in savings, part of which can be deployed into providing safety nets for poor segments of the society to ameliorate the effects of the subsidy removal.”www.mannastores.com


It was also learnt that the amount to be saved via the removal of fuel subsidy, would be invested in infrastructure development for the petroleum sector. This, to a large extent, is expected to boost local production of the product as against massive importation, which is currently the trend.

In this light, FG had expressed optimism that potential investors would be attracted to the country, especially in terms of building new refineries, which might in the long-run bring down the price of petrol.