THE National President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Festus Osifo, has stated that the Federal Government is still subsidizing petroleum.
President Bola Tinubu stated during his inauguration that the subsidy period is over, causing commodity prices to rise across the country.
However, months after the move, Osifo, who is also the president of the Trade Union Congress (TUC), stated that the government still pays a subsidy for the product due to the cost of crude oil on the international market and the dollar to naira rate.
“They [government] are paying subsidy today,” he said today on Channels Television’s Politics Today.
“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.
He said two things must happen for the government 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.”
President Tinubu acknowledged the challenges facing Nigerians in the wake of the subsidy removal but in July rolled out measures to cushion the impacts.
To “reduce the burden”, he pledged at least $264 million for agriculture, $165 million for small and medium-sized businesses, and $99 million for manufacturing.
“In the short and immediate terms, we will ensure staple foods are available and affordable,” he said.
“To this end, I have ordered the release of 200,000 metric tonnes of grains from strategic reserves to households,” Tinubu added.
