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More pains for Nigerians as FG plans to increase fuel price

Nigerians should brace up to spend more on fuel as the Federal Government is planning to shelve part of its subsidy payment responsibility which will inevitably lead to an increase in pump price.

The Nigerian National Petroleum Company Limited had capped average fuel prices at just above N600/litre a year ago after the price of the commodity tripled following the removal of subsidy by President Bola Tinubu.

There have been insinuations that the Federal Government was still paying for subsidies largely due to the devaluation of the naira and the rise in the price of crude oil. Although the government has continued to deny it market realities showed that the current pump price is artificial suggesting that the Tinubu administration is heavily subsidising the price of the commodity.

Sources said the subsidy payment has become too burdensome for the government and the only way out is to increase the pump price to reduce the burden.

The NNPC, the sole importer of the product is said to be owing companies where they sourced the product; the debts is said to have doubled to $6bn in the last four months. Some oil trading houses have already stopped participating in NNPC’s tenders for petrol because the overdue bills have pushed their exposure to Nigeria above the levels their companies allow.

This development comes as fuel scarcity has hit many major cities across the country. The NNPC has blamed distribution hitches but sources said the problem is more of insufficient supply.

“The Federal Government has been left with no option but to increase the pump price due to the mounting debts as a result of fuel subsidy,” a source said.

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Written by Olusesan Oba

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