FG still paying about N1 trillion on fuel subsidy monthly – Pinnacle Oil boss, Dickerman

Robert Dickerman, the CEO and Managing Director of Pinnacle Oil and Gas Limited, has disclosed that despite President Bola Tinubu’s announcement of total deregulation of petroleum products, the Nigerian Government continues to pay around one trillion naira monthly for petrol subsidies.

Speaking at Nigeria’s Downstream Forum during the Nigeria International Energy Summit in Abuja, Dickerman highlighted the persistence of substantial subsidies, maintaining that this sustains affordable petrol prices and could potentially facilitate smuggling to neighboring countries.

“Foreign investors, foreign lenders and government-run DFIs have been very clear about what they want to see: Conservative fiscal policy, tackling corruption, enabling competitive markets, and enforcement of fairness in markets through policy, regulation and the ability to enforce contracts. Keeping that context in mind, I want to point out that there is still a massive subsidy in PMS, albeit in the FX portion of PMS Price, not the global price in dollars.

“The consequences of this subsidy are: The cost of gasoline in Nigeria is the lowest in Africa by far, which encourages smuggling out, further depriving Nigeria of value.

“Smuggling causes Nigeria to subsidize neighboring countries even while our economy struggles. The cost is hurting the entire budget, Federal and State, as critical programs cannot be funded to pay this subsidy. It is currently calculated to be about 1 trillion Naira/month.

“Also, with this subsidy in place, ceasing subsidy payments would result in no petrol supply, if there are no refineries producing gasoline. All supplies come from the international market which will only sell at market prices.”