PENGASSAN: Why Tinubu’s govt paying subsidy for petrol

The Bola Tinubu-led Federal Government has resumed payment of subsidy payment on petroleum products.

President of the Trade Union Congress (TUC), Festus Osifo, made the claim while featuring on a TV programme.

Osifo, who doubles as National President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), stated that the

cost of crude oil in the international market and the forex crisis had forced government to resume subsidy payment for the products.

Petrol is selling at between N568 to N620 per litre.

However, the landing cost of petrol has N20 per litre. President Bola Tinubu had on June 30 scrapped the subsidy on petroleum products.

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The TUC President said: “The government is paying subsidy as today. In reality 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 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.

“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.”

The Star