The standard market price for the Premium Motor Spirit (PMS), also known as gasoline, has climbed to N 256 per liter.
The product still sells for the regulated price of N 165 per liter, bringing the subsidy to N 91 per liter. Independent Petroleum Marketers Association of Nigeria (IPMAN) operations controller Mike Osatuyi, who revealed to the Sunday Telegraph, claimed that this, caused by high crude oil prices, had skyrocketed subsidies on the market. product. Crude oil prices have stabilized at around $ 76 a barrel since last Wednesday, and data showed gasoline subsidies have risen to 150 billion naira per month.
“Already, the price of PMS (gasoline) has reached between N254 and N256 per liter compared to the official regulated price of N165 per liter,” Osatuyi said. “The cost of landing the PMS is also heading towards N 300 per liter if this crude price remains at this level,” he added.
This means that the gasoline subsidy would also increase. Using the daily gasoline consumption data of 69 million liters, the subsidy of N 91 per liter will amount to N 5.46 billion in one day.
The upward movement in crude oil prices came after government supply and demand data showed that not only were U.S. crude inventories lowest before the Covid-19 outbreak, but also a surprisingly huge drop in gasoline which attested to a strong acceleration in summer driving. . Nigeria currently depends only on the import of refined products because its refineries are not functioning.
With a price reaching $ 76 per barrel, this means that the price of refined products would also increase since the price of crude influences the price of refined products. West Texas Intermediate crude, the benchmark for U.S. oil, climbed to $ 74.25 a barrel, a high not seen since October 2018, before settling at $ 73.07.
While the rise on the day was only 23 cents or 0.3%, WTI gained as much as 2% on the week. Brent, the world’s oil benchmark, also peaked in 2018, at $ 76 a barrel, before consolidating to end the session at $ 74.50, down 31 cents or 0.4%.
However, oil prices dropped their first highs after reports the producer group OPEC + claimed it would add 500,000 barrels per day to its August production, after rising 440,000 bpd in July. .
For context, the OPEC + coalition of 23 countries kept 7 million bpd or more out of the market between April 2020 and March of this year, before gradually increasing supply.
WTI and Brent prices hit near three-year highs earlier today after the Energy Information Administration reported that U.S. crude inventories fell 7.614 million barrels last week, as analysts said. expected a draft of 3.942 million barrels.
According to the EIA, this was the lowest weekly stock of crude since March 2020, before the outbreak of the coronavirus pandemic in the United States which decimated demand for oil in the following months.
More than the crude levy, the surprise was in the gasoline levy reported by the EIA, which amounted to 2.93 million barrels last against the expectations of a construction of 833,000 barrels.
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