FG Spends N600 Billion Monthly on Fuel Subsidy – Rainoil CEO Reveals

Gabriel Ogbechie, the CEO of Rainoil Limited, has asserted that the contentious fuel subsidy payment was reinstated by the federal government subsequent to the depreciation of the Naira in the foreign exchange market.

Ogbechie said this on Tuesday at the Lagos-based Stanbic IBTC Energy and Infrastructure Breakfast Session.

He emphasized that the government’s fuel subsidy ranges from N400 to N500 per liter, with Nigeria using 40 million liters of fuel per day and the foreign currency rate at N1,300. This adds up to a monthly total of almost N600 billion.

He said; “When Mr. President came in May last year, one of the things he said was that Subsidy is gone. And truly, the subsidy was gone, because immediately the price of fuel moved from 200 to 500 per liter. At that point truly, subsidy was gone.

“During that period, Dollar was exchanging for N460, but a few weeks later, the government devalued the exchange rate. And Dollar moved to about N750. At that point, subsidy was beginning to come back.

“The moment the two markets officially closed, officially the market went to about N1,300. At that point, that conversation was out of the window. Subsidy was fully back on petrol. If you want to know where petrol should be, just look at where diesel is. Diesel is about N1,300 and petrol is still selling for N600.

Furthermore, he said that NNPC being the only petrol importer in the country implies that there is an ongoing subsidy, as prices had to be fixed. [CONTINUE READING HERE]