The National President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Festus Osifo, has said that the Federal Government of Nigeria is still paying subsidies on petroleum, contrary to President Bola Tinubu’s earlier declaration that the subsidy era had come to an end.
This revelation comes months after Tinubu’s inauguration, which triggered a significant hike in the cost of petroleum nationwide.
Osifo, who also holds the position of President of the Trade Union Congress (TUC), attributed the ongoing subsidy to the rising cost of crude oil in the international market and the fluctuating exchange rate between the Nigerian Naira and the US Dollar.
Speaking on Channels Television’s “Politics Today,” Osifo explained, “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 per 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.”
According to Osifo, two critical factors must align for the government to cease subsidizing petroleum: effective management of the exchange rate and the ability to increase supply to stabilize the exchange rate.
“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,” Osifo emphasized.
This revelation raises questions about the government’s ability to fulfill its promises and highlights the complex interplay of global market dynamics on the Nigerian economy.
It remains to be seen how the government will address this ongoing issue of petroleum subsidies in the face of mounting economic challenges.
