Pinnacle Oil CEO Exposes Ongoing N1 Trillion Monthly Fuel Subsidy by Federal Government

Robert Dickerman, the Chief Executive Officer and Managing Director of Pinnacle Oil and Gas Limited, has disclosed that despite the announcement of total deregulation of petroleum products by President Bola Tinubu, the Nigerian Government continues to expend approximately one trillion naira monthly on petrol subsidies.

Speaking at session six of Nigeria’s Downstream Forum during the Nigeria International Energy Summit (NIES) in Abuja, Dickerman emphasized that the substantial subsidy persists, contributing to the affordability of petrol in Nigeria and potentially fueling smuggling activities across neighboring countries.

He highlighted the detrimental effects of this ongoing subsidy, noting that Nigeria’s fuel prices are among the lowest in Africa, thereby incentivizing smuggling out of the country and further depriving Nigeria of its economic value.

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Dickerman underscored the financial strain imposed on the government’s budget, both at the federal and state levels, due to the exorbitant cost of the subsidy. He estimated the monthly subsidy expenditure to be around one trillion naira, emphasizing its adverse impact on critical programs and public services.

Furthermore, he cautioned against abrupt cessation of subsidy payments, warning that it could lead to petrol supply shortages, particularly in the absence of domestic refinery capacity. With all petrol supplies sourced from the international market, cessation of subsidies would result in market-driven prices, potentially exacerbating the financial burden on consumers.

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Dickerman urged stakeholders to prioritize conservative fiscal policies, combat corruption, and promote competitive markets to address the underlying issues perpetuating the subsidy regime. He emphasized the need for policy interventions to ensure fairness in markets and efficient contract enforcement, aligning with the expectations of foreign investors and lenders.

The revelation by the CEO of Pinnacle Oil sheds light on the continued fiscal challenges facing Nigeria’s petroleum sector and underscores the imperative for sustainable policy reforms to achieve long-term economic stability and prosperity.