FG spent over N12bn on fuel subsidy in five days
The Federal Government, through the Nigerian National Petroleum Corporation, NNPC, spent N12.69 billion to subsidise Premium Motor Spirit, PMS, in five days, between Monday, December 16 and Friday, December 20, 2019.
This was contained in data obtained, yesterday, from the Petroleum Products Pricing Regulatory Agency, PPPRA.
In the pricing templates for PMS, also known as petrol, the PPPRA put the average amount paid as subsidy in the five-day period at N32.53 per litre, while the Expected Open Market Price of petrol stood at an average of N177.53 per litre for the five-day period.
In addition, the PPPRA stated that 390.11 million litres of petrol was supplied across the country during the period.
Based on the average amount paid as subsidy in the five-day period, which stood at N32.53 per litre and the 390.11 million litres supplied across the country, the amount paid as subsidy by the NNPC on behalf of the federation stood at N12.69 billion
The Expected Open Market Price, EOMP, of petrol is the price the commodity is expected to be sold to motorists if the government stops paying subsidy on the commodity.
However, as at today, subsidy is borne by the NNPC on behalf of the federation. The NNPC, which is currently the sole importer of PMS into the country, bears the cost of subsidizing the commodity and deducts the cost from earnings from its domestic sale of crude oil and gas, before making remittances to the Federation Account.
Giving a breakdown of the price of PMS in the days under review, the PPPRA’s templates showed that on December 16, 2019, EOMP of petrol stood at N177.33 per litre, leaving the government to pay N32.33 per litre as subsidy, while 76.86 million litres of PMS was supplied across the country.
The price of PMS dropped to N177.32 per litre on December 17 while 82.97 million litres of PMS was supplied. Hence subsidy of N32.32 per litre.
Furthermore, on December 18 and 19, 2019, EOMP of PMS stood at N174.81 per litre and N177.92 per litre respectively, while PMS 78.11 million litres and 72.46 million litres were supplied respectively. Hence N29.81 per litre and N32.92 per litre were incurred as subsidy on each of those days respectively
To this end, N2.485 billion, N2.68 billion and N2.33 billion was incurred as subsidy by the NNPC on December 16, 17 and 18, 2019 respectively, while N2.33 billion and N2.81 billion was recorded as subsidy, on December 19 and December 20 respectively.
However, as at Monday, December 23, the Expected Open Market Price of petrol rose to N180.78 per litre, with subsidy rising to N35.78 per litre. However, the quantity of fuel supplied on December 23, 2019 was not available.