Nigeria’s Governors’ Forum (NGF) committee on subsidy has suggested that petrol pump price should be increased by 134.57 percent and sold for N380 per litre from N162 per litre.
The also asked for immediate removal of subsidy on the product as the payment was not sustainable.
The committee headed by the Governor of Kaduna State, Nasir El-Rufai, recommended that the removal of subsidies should be immediate to save the economy.
While presenting the recommendation, El-Rufai said N408.5 litre is the appropriate price in the circumstance but that with concessions to labour unions, N380 per litre could be the minimum.
He explained smugglers and illegal markets in neighbouring African countries were taken advantage of the subsidy regime.
El-Rufai stated, “The committee recommends PMS pump price increment from the current N162per litre to N408.5 per litre (negotiations with organized labour unions). N380per litre (settlement with organized labour).
“Even though we all supported deregulation of petroleum products prices last year, this agreement was suspended by the Federal Government because of a threat of industrial action by unions. This is the root of the problem and now we are back to losing between N70bn to N210bn per month.”
He further explained that in the 2021 budget the Nigerian National Petroleum Corporation (NNPC) had committed to remit a minimum of N120 billion per month to the federation account but had not been able to fulfill it.
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He pointed out that only about 12 states consumed two-thirds of the petrol, which was heavily subsidised.
Other governors who contributed to the debate included Governor Dapo Abiodun of Ogun State who said the 93 million litres which the NNPC claimed was consumed in Nigeria daily was unacceptable.
He noted that Nigeria, like other Organisation of the Petroleum Exporting Countries member countries, agreed to a cut production to keep the prices high but that Nigeria could not fully benefit from the regime because of subsidies.
The Kaduna governor said, “Between N70 billion and N210 billion is estimated to be spent every month to keep gasoline price at N162 per litre, this is below the cost price and the remittance to the federation account will shrink to less than N50bn per month or even zero if threats persist.
“We are already at zero. I understand for tomorrow, so this scenario has occurred.
“Why are we keeping the price at N162? We are keeping the price because the Federal Government and trade unions met and agreed to the suspension of some industrial action months back.”
