Report: Tinubu mulls subsidy reintroduction amid another imminent petrol price hike

• The consideration is necessitated by the soaring prices of crude oil in the international market and skyrocketing foreign exchange rates.
• Labour unions have vowed to embark on an indefinite strike if there is another hike in petrol price.

The federal government is contemplating returning to subsidising premium motor spirit (PMS) for Nigerians amid widespread hardship occasioned by the initial removal of the social and economic buffer in May.

According to TheCable, the consideration is necessitated by the soaring prices of crude oil in the international market and skyrocketing foreign exchange rates.

The landing cost of petroleum products which are refined outside Nigeria and imported into the country are determined by oil prices and foreign exchange rates.

Already, labour unions are up in arms and have vowed to embark on an indefinite strike if there is another hike in petrol price.

No decision has been made yet but the proposal is “firmly on the table” and President Bola Tinubu is considering it, TheCable quoted a source in the presidency as saying.

According to the source, the reintroduction of subsidy on petrol would be “temporary”.

The presidency official further said the “realistic” amount of petrol consumed in the country is now known following the removal of subsidy on Tinubu’s inauguration, hence the amount spent on subsidy “can now be controlled”.

On Monday, the Nigerian National Petroleum Company (NNPC) Limited said there are no plans to hike pump prices despite the rise in crude oil prices, landing cost, and fall in the value of the naira.

This is understood to be an option for Tinubu to keep the current prices, although private importers have not made a definite pronouncement on any possible adjustments.

But speculations around another increase in the pump price of petrol (currently at over N600) have caused apprehension across the country, leading to panic buying in the early hours of Tuesday.

In Nigeria, the petrol pump price has been increased twice since the subsidy was scrapped. It moved from N185 to over N500 in May, and later to N617 in July.

The exchange rate, which reached an all-time high of N950 at the parallel market, has also witnessed significant increases.

Since Tinubu announced the removal of the petrol subsidy in May l, Nigerians have been bludgeoned by economic hardship.

Foreign exchange challenges, coupled with the unrestrained slump of the naira — Nigeria’s local currency — have led to a sustained upward trend, in the prices of goods and services.