Nigeria’s Monthly Fuel Subsidy Exceeds N1 Trillion Despite Deregulation, Robert Dickerman Reveals

In a revelation that challenges the narrative of petroleum product deregulation, Robert Dickerman, the Chief Executive Officer and Managing Director of Pinnacle Oil and Gas Limited, disclosed that the Nigerian Government continues to shell out a staggering one trillion naira each month for petrol subsidies.

This revelation comes in the wake of President Bola Tinubu’s announcement of total deregulation of petroleum products during his inauguration. Speaking at a panel discussion during session six of Nigeria’s Downstream Forum at the Nigeria International Energy Summit (NIES) in Abuja, Dickerman emphasized the persistence of substantial subsidies, contributing to the affordable price of petrol but also potentially fueling smuggling activities to neighboring nations.

Dickerman stated, “There is still a massive subsidy in PMS, albeit in the FX portion of PMS Price, not the global price in dollars. The consequences of this subsidy are significant, with the cost of gasoline in Nigeria being the lowest in Africa, fostering smuggling activities that further deprive Nigeria of its economic value.”

He added, “Smuggling causes Nigeria to subsidize neighboring countries even as our economy grapples with the repercussions. The financial toll is extensive, impacting both Federal and State budgets, hindering funding for critical programs. The subsidy is currently estimated at around 1 trillion Naira per month.”

Dickerman also highlighted the potential consequences of ceasing subsidy payments, warning that without local refineries producing gasoline, a halt in subsidies could result in a shortage of petrol supply, as all fuel is sourced from the international market at market prices. This revelation raises questions about the economic implications of ongoing subsidy practices despite official declarations of deregulation.