The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has attributed the ongoing increase in petrol prices to the floating of the naira, rather than the removal of fuel subsidies.
Festus Osifo, President of PENGASSAN, emphasized that the devaluation of the naira is the root cause of Nigeria’s escalating fuel costs.
Osifo argued for a strategic management approach to the country’s exchange rate, stating, “The real problem is the devaluation of the naira, which has far-reaching effects across multiple sectors, including fuel pricing.” He suggested that if the naira had been pegged at N450 to the US dollar, petrol prices could have been kept below N400 even with the subsidy removal.
He explained, “In May last year, the official exchange rate was N450. If Total Energies made a profit of USD200 million, you would multiply that by N450 to get the naira equivalent. Today, that same USD200 million is multiplied by N1,600, significantly increasing the amount of naira collected by the government.”
Osifo pointed out that government agencies like the Federal Inland Revenue Service (FIRS) and Nigeria Customs Service are reporting higher revenues, attributing this not to subsidy removal, but to the impacts of devaluation and fluctuations in the exchange rate. “That is why you hear Customs and FIRS saying they’ve made trillions of naira,” he noted.
He further argued that if the exchange rate had been stabilized at N700 for oil sector distributors, the surge in petrol prices could have been mitigated.
