The National President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Festus Osifo, has disclosed that the Federal Government is still subsidizing petroleum products.
Osifo, who also serves as the President of the Trade Union Congress (TUC), made this assertion during an appearance on Channels TV’s Politics Today program on Friday.
He explained that due to the current cost of crude oil in the international market and the exchange rate between the dollar and the naira, the government continues to provide subsidies for petroleum products.
“They [the government] are currently providing subsidies. In reality, there is still a subsidy in place because when the earlier fuel price was determined, the international market price for crude oil was approximately $80 per barrel,” Osifo stated.
“However, today, it has risen to about $93 to $94 per barrel for Brent crude. Consequently, because the crude oil price has increased, the petroleum price also needed to be adjusted,” he added.
Osifo emphasized that for the government to cease subsidizing petroleum, effective management of the exchange rate and an increase in the supply of petroleum products are necessary.
“So, if the exchange rate improves today and we can enhance the supply chain, we will no longer require subsidies. However, given the current exchange rate and the international crude oil prices, we have reintroduced subsidies,” he concluded.