Festus Osifo, the National President of the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, has said that the Federal Government was still subsidising petroleum products.
Osifo, who is also the president of the Trade Union Congress, TUC, stated this while speaking on Channels TV’s Politics Today on Friday, adding that due to the cost of crude oil in the international market and the dollar-to-naira rate, the government still pays subsidy for the product.
Osifo said, “They [the government] are paying subsidy today. In reality, today, there is a subsidy because, as of when the earlier price was determined, the cost of crude in the international market was somewhere around $80 for a barrel.
“But today, it has moved to about $93/94 per barrel for Brent crude. So, because it has moved, then the price [of petroleum] also needed to move,” he added.
“The only reason the price will not move is when you are able to manage your exchange rate effectively and you are able to pump in supply and bring down the exchange rate.
“So, if the exchange rate comes down today, we will not be paying a subsidy. But with the exchange rate value and the price of crude oil in the international market, we have introduced subsidy.”