Former Minister of State for Defence, Musiliu Obanikoro, has raised concerns suggesting that the Federal Government might be filling the widening disparity between the United States dollar and Nigeria’s naira in the final pricing of Premium Motor Spirit (PMS), commonly known as petrol.
Obanikoro, a former lawmaker who represented Lagos Central Senatorial District from 2003 to 2007, made these remarks as a guest on Channels Television’s Sunrise Daily program on Wednesday.
The All Progressives Congress (APC) stalwart emphasized the importance of transparency from the Federal Government regarding whether or not subsidy has been reinstated.
Bola Tinubu, in his inaugural speech on May 29, 2023, announced the end of the petrol subsidy era, resulting in a significant spike in the price of the essential commodity to over N600, varying across different regions of the country.
Furthermore, the new administration’s policies led to the depreciation of the naira against foreign currencies, with the exchange rate plummeting to an unprecedented low, transitioning from about $1/N700 last May to over $1/N1500 at present.
Numerous stakeholders within the downstream sector, particularly those engaged in the marketing and distribution of petroleum products, have expressed grave concerns regarding the fluctuating value of the naira against the dollar, which significantly impacts the pump price of fuel. Some have resorted to strikes and have even threatened to raise the price of the commodity.
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Recently, both the World Bank and Robert Dickerman, the Chief Executive Officer and Managing Director of Pinnacle Oil and Gas Limited, asserted that the Federal Government is still subsidizing the product.
This week, human rights lawyer Femi Falana called upon the Federal Government to promptly confirm or refute the serious allegation and put an end to the opacity surrounding the importation of fuel from foreign countries.
When questioned about the potential return of fuel subsidy, Obanikoro responded, “Regarding subsidy, Mr. Falana is well aware of the price of crude oil in dollars. With the significant depreciation of our currency, the naira, and the dollarization of crude, it is evident that there must be some form of cushion. However, the extent of this cushioning remains unknown, and only a government representative can address this matter.”
“But my common sense tells me that there is a gap and because of the pain in the country, the government cannot allow that lacuna to be left unfilled, hence government may chip in some amount of money to fill in that gap.
“I do believe that, it needs to be communicated, no doubt about that. That is why it is important to take the people along step by step ” Obanikoro said.
