Tinubu Mulls ‘Temporary Subsidy’ On PMS As Landing Cost Increases

Loading

A “temporary subsidy” on Premium Motor Spirit (PMS), commonly refered to as petrol, would appear to be under President Bola Ahmed Tinubu’s consideration as crude oil prices and foreign exchange rates keep on soaring.

There is yet no final decision, presidency sources disclosed, adding that the proposal was “firmly on the table” as Nigerians continue to groan under unfavourable economic realities in the wake of the petrol subsidy removal in May 2023.

Labour unions have already threatened to embark on an indefinite strike if the petrol price further surged.

On Monday, the Kenyan government re-introduced fuel subsidies to curb soaring prices of petrol, kerosene, and diesel in the East African country.

The move came after months of violent anti-government protests over the burden of high cost of living.

A Presidency official, said the “realistic” amount of petrol consumed in the country was now known following the removal of subsidy on Tinubu’s inauguration, hence the amount spent on subsidy “can now be controlled”.

The Nigerian National Petroleum Company Limited (NNPCL), on Monday, said there were no plans to hike pump prices despite the rise in crude oil prices, landing cost, and fall in the value of the Naira.

This appears to be an option for Tinubu to keep the current prices, although, private importers have not made a definite pronouncement on any possible adjustments.

However, speculations around another increase in the pump price of petrol (currently at over N600) have caused tensions across the country, leading to panic-buying in the early hours of Tuesday.

The petrol pump price in Nigeria, has been increased twice since the subsidy was scrapped. It moved from N185 to over N500 in May, and later to N617 in July.

The exchange rate, which reached an all-time high of N950 at the parallel market, has also witnessed significant increases.

Since Tinubu announced the removal of the petrol subsidy, Nigerians have had no respite from price hikes.

Foreign exchange challenges, coupled with the unrestrained slump of the Naira have led to a sustained upward trend, in the prices of goods and services.

The Central Bank of Nigeria (CBN) plans to implement new measures to stabilise the Naira against the dollar.

Weeks after Tinubu was inaugurated as Nigeria’s president, his administration, already fraught with legitimacy issues, quickly introduced several policies in a bid to revive the economy.

However, with the present economic realities, it seems that these policies are not yet posting the desired results.

Share This

Related posts

Leave a Comment