Facts have emerged of how the federal government led by President Bola Tinubu still continues to pay subsidy for petroleum products.
Daily Report Nigeria reports that President Tinubu announced an end to subsidy during his inaugural speech on May 29, 2023.
The move has since caused price of goods and services to skyrocket above the roof within the last five months.
However, details have emerged that the government continues to subsidize petroleum products despite the announcement.
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This was revealed by the National President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Festus Osifo
Osifo, who is also the president of the Trade Union Congress (TUC), said the continued payment of subsidy is due to the cost of crude oil in the international market and the dollar to naira rate.
“They [government] are paying subsidy today,” he said on Channels Television’s Politics Today on Friday.
“In reality today, there is subsidy because as of when the earlier price was determined, the price of crude in the international market was somewhere around $80 for a barrel. But today, it has moved to about $93/94 per barrel for Brent crude. So, because it has moved, then the price [of petroleum] also needed to move,” the PENGASSAN boss added.
Osifo also pointed out two things the government must do to stop subsidising petroleum.
“The only reason the price will not move is when you are able to manage your exchange rate effectively and you are able to pump in supply and bring down the exchange rate,” Osifo maintained.
“So, if the exchange rate comes down today, we will not be paying subsidy. But with the exchange rate value and the price of crude oil in the international market, we have introduced subsidy.”
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