The Independent Petroleum Marketers Association of Nigeria (IPMAN) has expressed concerns regarding the soaring landing cost of Premium Motor Spirit (PMS), also known as petrol, making it unfeasible for petrol marketers to import the essential commodity.
According to Zarama Mustapha, IPMAN National Operations Controller, the current landing cost of PMS exceeds ₦1,200 per litre, without factoring in the margin of marketers, transportation, and other logistics. He noted that the Nigerian National Petroleum Company (NNPC) Limited sells to marketers at ₦565, resulting in a subsidy of almost ₦600 to ₦700. Mustapha emphasized the existence of an under-recovery challenge, regardless of the official stance on subsidy.
The resurgence of petrol subsidy has been a significant demand of the #EndBadGovernance demonstrators protesting hunger and food inflation in Nigeria. Despite previous announcements of subsidy removal by President Bola Tinubu, the legitimate demands of the protesters remain consistent with the economic realities of the country. Mustapha acknowledged the legitimacy of these demands while expressing doubts about the government’s ability to meet these demands. He cited the complexity of the current situation and emphasized the need for patience to navigate through these challenges.
Mustapha also highlighted policy inconsistency and forex volatility as significant factors contributing to the frequent petrol queues in the country, noting that many independent marketers are struggling due to increased capital requirements and reduced profitability in the post-subsidy era. Additionally, he addressed the impact of President Bola Tinubu’s directive for the sale of crude in naira, pointing out the potential reduction in dollar demand and the positive effect on the valuation of the local currency.
