The federal government may have spent around N1 trillion to subsidize 102 million liters of Premium Motor Spirit (PMS) over the next few months, as current challenges push operators downstream of the oil industry. of the country facing a liquidity crisis. While Nigeria has subsidized almost the entire volume of PMS commonly known as gasoline consumed in the West African region, industry players told The Guardian yesterday that the federal government could pave the way for the trade. smuggling and adulteration of regional products due to the country’s downstream problems. In addition to impending layoffs and poor safety practices due to recurrent fires at railway stations and roads, stakeholders claim that more than 35% of them, especially independent traders, have been injured. kicked out of the house. Nigerian National Petroleum Corporation (NNPC) CEO Mele Kyari has called for gasoline to be sold at 256 naira per liter in the country, adding that about 150 billion naira is paid monthly in the form of subsidies. From January to June this year, the subsidy amounted to about 900 billion naira. While the country’s daily fuel consumption stood at around 60 million liters in January, the group said the trend has since increased to 102 million liters. As crude oil prices in the international market continue to rise, standing at $ 76 \/ bbl yesterday after rising from around $ 30 \/ bbl about a year ago, the devaluation of the naira has nearly doubled and remained unstable, as well as fluctuations in gasoline pump prices, the state oil company remained the sole importer of the product. The Product and Pipeline Marketing Company (PPMC) sells the merchandise to retailers for 148 N \/ liter, but marketers say adoption often pushes the wholesale price above N157 \/ liter, including shipping costs and union fees. As a result, the development generates a marginal profit of around N5 \/ liter which, in fact, can be spent on other costs including operating expenses. Most stakeholders claim that this challenge makes smuggling and adulteration of products flourish, as traders move black gold to neighboring countries, where it costs up to N400 per liter. Up to 35% of oil traders, especially independent traders, have closed their facilities, due to declining bank funding amid poor loan repayment terms. In March last year, the Minister of Petroleum Resources, Timipre Sylva, announced that the downstream sector had been completely abolished and that subsidies would no longer be paid for oil, especially when the contingency budget was not not implemented in 2021. Nigerians do not know the minister is going to overthrow. While crude oil prices were then at record highs, the government reduced prices at the pump, but as the situation in the international market improved, oil prices gradually rose, prompting a reaction from the government. public. Deregulation was immediately halted as labor opposed the government. A dialogue has been engaged between the unions and the government for more than four months. If no budget is allocated, the NNPC begins to cover the differences in landing costs and prices at the pump. The direct consequence has been the incessant borrowing and the exhaustion of foreign direct investment.

By snehtv

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