The money spent by the Federal Government in subsidising petrol is anticipated to gulp a whopping N750.81 billion in 2020, the latest data from the Petroleum Product Pricing Regulatory Agency (PPRA) has revealed.
The responsibility of paying for petrol subsidy has been borne for two years on behalf of the Federal Government by the Nigerian National Petroleum Corporation (NNPC).
The data which was released on Tuesday shows that the N750.81 billion is N301.81bn more than the N450 billion Zainab Ahmed, the Finance Minister, disclosed recently to have been endorsed for subsidy payment purpose in 2020.
Her disclosure had been made during the 2020 budget presentation, where she claimed N450 billion had been made as provision for “under-recovery” of cost regarding the importation of Premium Motor Spirit, also known as petrol.
“A provision has been made in the budget for under-recovery for the PMS in the sum of N450bn provided in the fiscal framework. It is under-recovery because it is a cost operation for the NNPC,” the minister had noted.
Ahmed also said the NNPC would bear the cost, being part of its operations cost in accordance with current practice.
According to the PPRA pricing template for petrol, the Expected Open Market Price for petrol hovered ranged from N165 to N178 per litre in November and December 2019.
The irregularity in the EOMP had been ascribed to the instability in the global oil market by operators.
For example, the EOMPs for petrol on December 5, 4, 3 and 2 were N171.12/litre, N170.36/litre, N165.98/litre and N166.44/litre respectively, a testament that the market had been marred by fluctuation and uncertainty.
According to reports, the ex-depot price for collection of petrol from the NNPC was N133.28 per litre. The NNPC is the sole importer of the product into Nigeria.
Interestingly, the difference between the ex-depot price for petrol collection for the above selected days shows that every litre of petrol consumed in the country had been costing the NNPC an extra spending of an average of about N37.4.
Nigeria’s daily consumption of petrol is put at around 55 million litres.