ABUJA – Festus Osifo, the National President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), has asserted that the Federal Government continues to subsidize petroleum products despite fluctuations in the international oil market.
Osifo, who doubles as the president of the Trade Union Congress (TUC), made this revelation during an appearance on Channels TV’s Politics Today last Friday.
Highlighting the factors contributing to the ongoing subsidy, Osifo pointed to the rising cost of crude oil on the global stage and the current dollar to naira exchange rate. “The government is indeed subsidizing petroleum. When the previous price was set, Brent crude was trading at around $80 per barrel. Now, it hovers around $93 to $94 per barrel. This shift necessitates a corresponding adjustment in petroleum prices,” Osifo explained.
He further emphasized that the government could cease the subsidy if certain economic conditions were met. “The only scenario where petroleum prices remain stable is when the exchange rate is effectively managed, leading to a decrease in the rate. If the exchange rate drops, the subsidy would be unnecessary. However, given the current exchange rate and international crude oil prices, the subsidy remains in place,” Osifo concluded.
The ongoing subsidy raises questions about the sustainability of Nigeria’s petroleum pricing strategy, especially in light of global economic uncertainties.