Economy
Global oil price surge put pressure on government to remove daily petrol subsidy of N8.28b

—-NNPC , PPPRA disagree on exact figures of petrol subsidy.
–as PMS landing cost hits N264.65/Litre
The rapid rise in global oil prices to record highs has pushed the subsidy cost being incurred by the Federal Government to N8.28bn daily.
This has therefore put pressure on the Nigeria National Petroleum Corporation(NNPC) to remove subsidy on the product which analysts said is consuming more than 50 per cent of its remittances to the Federation Account.
The data also revealed that without subsidy, petrol would be selling for about N300 per litre as the landing cost of the product rose to N276.94 per litre last Friday from N249.42 per litre in July 30.
The Economic Confidential had reported on September 28 that the NNPC spent a total of N905.27bn on petrol subsidy from January to August, citing data from the corporation.
The subsidy, which the NNPC prefers to call ‘value shortfall’ or ‘under-recovery, resurfaced in January this year as the government left the pump price of petrol unchanged at N162-N165 per litre despite the increase in oil prices.
President Muhammadu Buhari has said the federal government’s expenses on petrol subsidy has eaten into the revenue that should have been available to fund the 2021 budget.
He spoke on Thursday when he presented the 2022 appropriation bill at the National Assembly.
He said the government was forced to suspend a further increase in the pump price of petrol due to opposition from the labour unions and other stakeholders.
“The National Assembly will recall that in March 2020, the Petroleum Products Pricing Regulatory Agency(PPPRA) announced that the price of petrol would henceforth be determined by market forces.
“However, as the combination of rising crude oil prices and exchange rate combined to push the price above the hitherto regulated price of 145 Naira per litre, opposition against the policy of price deregulation hardened on the part of labour unions in particular.
“Government had to suspend further upward price adjustments while engaging labour on the subject. This petrol subsidy significantly eroded revenues that should have been available to fund the budget”, observed President Buhari.
The Federal Government had in March 2020 removed petrol subsidy after reducing the pump price of the product to N125 per litre from N145 following the crash in oil prices.
The NNPC, which has been the sole importer of petrol into the country in recent years, has been bearing the subsidy cost since it resurfaced.
The price of crude oil, which accounts for a large chunk of the final cost of petrol, has continued to rise in recent months, with Brent, the international oil benchmark, closing at $82.39 on October 8, up from $77.72 on July 30. It increased further to $83.94 per barrel as of 5:05 pm Nigerian time on Monday.
The Petroleum Products Pricing Regulatory Agency(PPPRA) had in March this year released a pricing template that indicated the guiding prices for the month.
The template, which showed that the petrol pump price was expected to range from N209.61 to N212.61 per litre, was greeted with widespread public outcry and was later deleted by the agency from its website.
It was based on an average oil price of $62.22 per barrel, and the landing cost of petrol was put at N189.61 per litre.
Based on the PPPRA template and Platts data, the expected pump price of petrol rose to N299.94 per litre on October 8 from N272.34 per litre on July 30.
The expected retail price of N299.94 per litre and the current pump price of N162 per litre indicate a subsidy of N137.94 per litre as of October 8, compared to N110.34 per litre on July 30.
With daily petrol consumption put at about 60 million litres by the NNPC and a subsidy of N N137.94 per litre, daily subsidy increased to N8.28bn last Friday from N6.62bn on July 30.
The rising price of crude oil pushed the cost of petrol quoted on Platts to $822.75 per metric tonne (N254.25 per litre, using the I&E rate of N414.40/$1) on October 8 from $748.50 per MT (N228.91 per litre) on July 30.
The freight cost increased to $26.77 per MT (N8.27 per litre) last Friday from an average of $21.63 per MT (N6.62 per litre) used by the PPPRA in its March template.
Other cost elements that make up the landing cost include lightering expenses (N4.81), Nigerian Ports Authority charge (N2.49), Nigerian Maritime Administration and Safety Agency charge (N0.23), jetty throughput charge (N1.61), storage charge (N2.58), and financing (N2.17).
The pump price is the sum of the landing cost, wholesale margin (N4.03), admin charge (N1.23), transporters allowance (N3.89), bridging fund (N7.51), marine transport average (N0.15), and retailer margin (N6.19).
While marketers have continued to stress the need to allow market forces to determine the pump price of petrol and do away with subsidy, it remains uncertain whether the discussions between the Federal Government and labour unions will lead to the deregulation of petrol prices.
Meanwhile, both the NNPC and PPPRA have disagreed on the actual amount which the government is pending as a petroleum subsidy.
According to a source in the Petroleum Products Pricing Regulatory Agency (PPPRA), there exists a difference between the agency’s cost and that of the Nigerian National Petroleum Corporation (NNPC).
A subsidiary of the NNPC, the Pipelines and Products Marketing Company(PPMC) is the sole importer of the product.
The NNPC said the source has a higher landing cost than that of the PPPRA. Although the agency had last year announced the deregulation of the product, the Federal Government had recourse to subsidising it when the landing cost became unbearable for the end-users.
The NNPC that termed it under recovery regime has left the pump price at a band between N162 and N165 per litre.
From the PPPRA landing cost of N264.65 per litre, there exists a subsidy or an under-recovery of N102.65 per litre.
In the last few years, many stakeholders within and outside the federal government have called for the scrapping of the subsidy regime for premium motor spirit (PMS), better known as petrol.
Zainab Ahmed, Minister of Finance, Budget and National Planning, in July 2021, advocated the end of fuel subsidy, saying it “costs as much as N150 billion” monthly.
Her comment came four months after Mele Kyari, Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), had said the company “may no longer be in a position” to bear the “subsidy burden”.
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Economy
NNPCL raises alarm over syndicated attacks to distract leadership from ongoing reforms

Funso OLOJO
The Nigerian National Petroleum Company Limited (NNPCL) has raised the alarm over what it described as a coordinated sabotage campaign on its management.
In a statement by the management of the Corporation, the attack was being sponsored by whom it described as ‘known and faceless actors’ to distract its management from its reform agenda that is meant to rid the corporation of the endemic corruption that has eaten deep into the operations of the national oil company.
” The management of NNPCL has uncovered an emerging coordinated sabotage campaign being waged by a syndicate of known and faceless actors, both outside and within various levels of the organisation.
“This group is actively spreading lies and misinformation simply to discredit NNPC Ltd.’s leadership and derail the organisation’s ongoing transformation into a corruption-free, performance-driven energy company, in line with the mandate of His Excellency, the President of the Federal Republic of Nigeria.
“Their tactics include planting scandalous and fabricated reports, curated to distract leadership, mislead the public, and undermine the commitment of our dedicated workforce and reform-minded Nigerians.
“These are calculated efforts by those who feel threatened by reform, transparency, accountability, and change—clear evidence of the lengths to which they will go to obstruct the transformation of Nigeria’s foremost energy institution.
“We expect a surge of defamatory content in the days and weeks ahead.
” NNPC Ltd. remains undeterred. The transformation is underway, and no amount of sabotage will stop it.
“We urge our dedicated staff, stakeholders, and all patriotic Nigerians to stay focused, ignore the noise and not be discouraged. We remain on mission.
It could be recalled that after the removal of Mele Kyari as the Group Managing Director of the NNPCL, the new management uncovered an homonguous scale of misappropriation of public funds running into billions of dollars which led to the sack of some of the senior staff, including the Managing Directors of the State- owned Refineries.
The investigation launched into the financial recklessness of the past administration of the NNPCL involved the sum of $2.96billion.
In May,2025, the Economic and Financial Crimes Commission(EFCC) detained Mr Kyari over the investigation.
The anti- graft agency also uncovered a staggering N80 billion in multiple bank accounts belonging to one of the sacked Managing Directors of the Nigerian National Petroleum Corporation Limited (NNPCL) refineries.
The discovery was part of an ongoing investigation into the alleged misappropriation of $2.96 billion for refinery rehabilitation.
It could also be recalled that the anti-graft agency arrested former managing directors and senior officials of the three major state-owned refineries, including Port Harcourt Refining Company (PHRC), Warri Refining and Petrochemical Company (WRPC), and Kaduna Refining and Petrochemical Company (KRPC).
Also recall the new NNPCL management had also fired the Managing Directors of the three refineries under its purview
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