Petrol subsidy gulped N650.2bn in 12 months – Report

The federal government spent a total N650.2bn in subsidising premium motor spirit; latest statistics obtained from the Nigerian National Petroleum Corporation have shown.

The PMS, popularly known as petrol, is imported into Nigeria solely by the federal government-owned NNPC.

The corporation subsidises the commodity to ensure that it is not sold above N145 per litre at filling stations across the country.

The NNPC, however, classifies its subsidy spending as under-recovery as it has repeatedly argued that only the National Assembly can approve subsidy.

Under-recovery is the additional cost that the NNPC is incurring in subsidising the price of petrol in order to ensure that it is sold at the regulated price of N145 per litre, even when the real market price is above this regulated rate.

Findings from the oil firm’s most recent monthly financial and operations report obtained in Abuja on Sunday showed that the government spent N650.2bn in subsidising petrol from April 2018 to March 2019.

On the monthly subsidy expenses, statistics from the report showed that the corporation spent N52.5bn, N60.6bn, N80.2bn, N51.2bn, N65.9bn and N45.8bn in April, May, June, July, August and September 2018, respectively.

In October, November and December 2018, the government, through the NNPC, spent N40.5bn, N2.9bn and N13.3bn, respectively.

For January, February and March 2019, it spent N104.3bn, N102.3bn and N30.6bn, respectively.

A further analysis of the report showed that the highest amount of N104.35bn was spent on subsidy in January 2019.

This was followed by the N102.34bn that was spent in February this year, while the lowest sum spent on subsidy was the N2.88bn expended in November 2018.

Although the NNPC’s latest report did not capture subsidy expenses by the oil corporation beyond March 2019, findings by our correspondent showed that the corporation would have spent about N308bn on subsidy in the second quarter of 2019.

This is because by importing 5.61 billion litres of the PMS into Nigeria in the second quarter of this year, the corporation would have incurred about N308.6bn as subsidy.

Figures from the National Bureau of Statistics showed that the volume of the PMS imported into Nigeria rose by 15.2 per cent in the second quarter of this year to 5.61 billion litres.