The upturn in global crude oil prices has pushed the landing cost of Premium Motor Spirit (petrol) imported into Nigeria to over N282 per litre.
The further rise in the landing cost of petrol means increased subsidy as the pump price of the product remains steady at N162-N165 per litre.
The landing cost of the product rose to N282.29 per litre on January 20 as the international oil benchmark, Brent crude, jumped to $89.75 per barrel that day from $77.24 per barrel on December 31, 2021.
Brent rose further on Wednesday to $90.22 per barrel as of 5.19 pm Nigerian time, its highest level since 2014.
The sharp rise in global oil prices to record highs has pushed the subsidy cost being incurred by the Federal Government.
Marketers have increased the price of Automotive Gas Oil, also known as diesel, to N355-N360 per litre.
The PUNCH had reported on January 14 that diesel price increased further to N350 per litre in some filling stations in Lagos.
Our correspondent observed on Wednesday that Mobil filling station, along the Lagos-Ibadan Expressway, sold the product for N360 per litre, while Oando, ENYO and Fatgbems filling stations sold it for N355.
The price of diesel, which is not regulated by the government, surged by 60 per cent in one year from an average price of N225 per litre in January 2021.
Diesel is mostly used by businesses, especially manufacturers, to power their generators amid a lack of reliable power supply from the national grid. Many vehicles transporting goods and people across the country also use diesel.
An analysis of data collated by our correspondent showed that without subsidy, petrol would be selling for about N305.29 per litre as of January 20.
The PUNCH had reported on December 23 that the Nigerian National Petroleum Corporation spent a total of N1.16tn on petrol subsidy from January to November, citing data from the corporation.
The subsidy, which the NNPC prefers to call ‘value shortfall’ or ‘under-recovery’, resurfaced early last year as the government left the pump price of petrol unchanged at N162-N165 per litre despite the increase in oil prices.
The Federal Government had in March 2020 removed petrol subsidy after reducing the pump price of the product to N125 per litre from N145 following the crash in oil prices.
The NNPC, which has been the sole importer of petrol into the country in recent years, has been bearing the subsidy cost since it resurfaced.