The initial intention of the government to subsidise petrol was simply to make the product affordable for Nigerians and make life easier. So, the average price of petrol in the world can be as high as N590, however, the Nigerian Government will subsidise the product and fix price at N185 bringing total amount of subsidy per litre to N405.
The average consumption of litres of petrol in Nigeria per day is 60 million litres. However, marketers of the product load as much as 100 million litres and above per day.
This means the Nigerian government is expected to pay as much as N405 × 100,000,000 (litres) as subsidy per day to the marketers of the product to keep prices at N185 for instance. This brings the amount to N40.5 billion daily and about N1.2 trillion monthly. Kindly take note that this amount can either decrease or increase following prices of petrol at the international market.
The irony of the whole arrangement was that petroleum marketers (major petrol dealers with tank farms) usually divert larger quantity of the subsidised petrol to neighbouring countries to resell at the international market price. So, they make same amount of money the Nigerian government has paid on the subsidised petrol at the neighbouring countries.
This makes the product relatively scarce in Nigeria as the left over becomes lower than the daily consumption in the country. The implication is that petrol stations will be selling fairly higher than the fixed price of N185 (some sells N190, N205, N225, N250 and so on depending on the area). And during peak periods of scarcity, which are also engineered by the marketers, Nigerians still buy same subsidised petrol for as high as N400, N500 and even N800 as the case was in first quarter of this year while sleeping in filling stations. Again, marketers make double.
The marketers also import above the daily consumption of 60 million litres as seen above and still force the Federal Government to pay subsidy on the excesses, which are usually part of what they smuggle to neighbouring countries. Again, marketers dupe Nigeria.
- Balogun Ibrahim, Epe, Lagos State.
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