Subsidy remove not cause of hike in price of petrol, TUC President, Festus Osifo reveals cause
The President of the Trade Union Congress (TUC), Festus Osifo, has clarified that the recent surge in fuel prices in Nigeria is largely due to the devaluation of the naira, not the removal of the fuel subsidy.
During an appearance on Channels Television’s “Politics Today”, Osifo emphasized that the devaluation of the national currency has had a far more significant impact on petrol prices than the subsidy removal itself.
Osifo explained that, had the naira not been devalued, petrol prices would likely be around N350 per litre. He stressed that “the ultimate elephant in the room is devaluation,” pointing to the current exchange rate as the main driving factor behind the high cost of petrol.
According to Osifo, the official exchange rate of N1,600 per US dollar is unsustainable and has directly contributed to the spike in fuel prices, as the cost of importing fuel has risen alongside the weakening naira. In his dual capacity as TUC President and President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Osifo also highlighted that despite the recent increases in petrol prices, the Nigerian National Petroleum Company Limited (NNPCL) continues to absorb some of the costs, providing an indirect subsidy.
He noted that the current petrol pump price is not fully reflective of market conditions, as NNPCL has been shouldering a portion of the price difference to cushion the impact on consumers.
To address the ongoing fuel price challenges, Osifo proposed that the federal government grant NNPCL access to a special foreign exchange rate. This preferential rate, he argued, would enable the national oil company to procure fuel at a lower cost, thereby reducing petrol prices for consumers. He suggested that such a rate would allow marketers to source petrol from the Dangote Refinery at a more affordable price.
“If NNPCL is granted a special forex rate of about N1,000 per dollar, the cost of petrol importation will crash, and fuel prices will drop to around N600 per litre,” Osifo explained. This, he believes, would offer a more sustainable solution to the country’s fuel price crisis.
