Subsidy: NNPC Effects New Fuel Prices

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The Nigerian National Petroleum Corporation (NNPC) has finally announced the long-awaited price for petrol following the removal of the controversial subsidy, which cost almost $10bn annually. The move was made on Wednesday morning to provide clarity around prices after the subsidy was removed.

According to BusinessDay, NNPC now retail fuel at N488 a litre at its station on Kingsway Ikoyi in Lagos, while the NNPC Mega Station at Lagos Bus Stop in Port Harcourt sells for N511 per litre. NNPC is the sole supplier of petrol in Nigeria, and it is expected that other marketers will take a cue from NNPC’s prices and adjust their own pump prices accordingly.

NNPC Fuel Prices from May 31 2023

Analysts have noted that since NNPC has implemented different pump prices for different cities, it may suggest that not only has the subsidy been removed, but also that the wasteful price equalisation mechanism, which ensured petrol had the same official price all over Nigeria, has also been removed.

See Also: Fuel Price Hike: Lagos, Abuja Residents Suffer as Price Increases

It is not yet clear what FX exchange rate NNPC has used to arrive at its pump price, but it could be around N600/$. President Bola Tinubu, who recently resumed at Aso Rock, held a long meeting with the CEO of NNPC and CBN governor Godwin Emefiele on the vexed matters of fuel subsidy and the multiple foreign exchange rates. This was after Tinubu had announced in his inauguration speech that subsidy was gone and that the CBN had been mandated to abrogate the multiple exchange rates regime.

The new fuel prices have been met with mixed reactions. Some Nigerians feel that the prices are too high, while others are relieved that the subsidy has been removed. It remains to be seen how the new prices will affect the economy in the long run, but for now, Nigerians will have to adjust to the new reality at the pump.

Source: BusinessDay NG

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