Festus Osifo, the National President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and also the president of the Trade Union Congress (TUC), has asserted that the Federal Government is still paying a subsidy on Premium Motor Spirit, known as fuel subsidy.
According to Vanguard, he made these comments during an appearance on Channels TV’s Politics Today program. He claimed that the government is currently paying the subsidy because, when the previous pricing was established, the international market’s crude oil cost was approximately $80 per barrel.
He said that the price has now escalated to around $93 to $94 per barrel for Brent crude. Consequently, he argued that the petroleum price should adjust accordingly.
Furthermore, he emphasized that for the government to discontinue subsidizing petroleum, it would require effective management of the exchange rate and an increase in supply to reduce the exchange rate. He asserted that as long as the exchange rate remains high and international crude oil prices continue to rise, subsidy remains in effect.