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Fuel scarcity or not, govt paying N1.81bn on subsidy daily

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The Federal Government is still spending about N1.81bn daily to subsidise the Premium Motor Spirit, otherwise called petrol, notwithstanding the nationwide scarcity of the product.

Latest figures from the Petroleum Products Pricing Regulatory Agency show that the government is paying N45.28 as subsidy for every litre of petrol consumed in Nigeria.

Specifically, the agency, in its pricing template released on May 21, 2015, based on prices for May 20, 2015, stated that the Expected Open Market price or total cost for petrol was N132.28 per litre.

This was against a retail regulated price of N87 per litre. The difference between the EOMP and the retail price is therefore N45.28.

According to the Nigerian National Petroleum Corporation, Nigeria consumes about 40 million litres of the PMS daily.

Multiplying the amount of fuel consumed across the country on a daily basis with the current amount spent on subsidising the product, it means that the government spends about N1.81bn on subsidy daily, provided the N45.28 per litre subsidy figure persists.

The PPPRA stated that the effective date of the approved pricing template was January 19, 2015, noting that the actual landing cost of the product was N116.79 per litre.

Meanwhile, many independent marketers hardly sell at the regulated N87 price since the latest scarcity of petrol started.

The scarcity of fuel has continued throughout the country.

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