Petrol subsidy rises to N47.5/litre as oil price hits $67.86
The subsidy on premium motor spirit, popularly known as petrol, has risen to N47.5 per litre as the expected open market price of the commodity hit N180.78 on Monday, latest data from the Petroleum Products Pricing Regulatory Agency showed.
Brent, the international benchmark against which Nigeria’s oil is priced, appreciated on Thursday to $67.86 per barrel, as it increased by $0.66 when compared with the previous day’s price.
Industry data put the cost of the commodity at $67.86 per barrel as of 10.50am Standard Eastern Time, a development that showed further positive movements in global crude prices.
This came as figures obtained from the PPPRA showed that the Nigerian National Petroleum Corporation was currently spending an average of N47.5 as subsidy on every litre of PMS.
Latest data from the PPPRA’s PMS pricing templates for December 12, 16, 17, 18, 19 and 23 put the expected open market prices of petrol per litre at N172.92, N177.33, N177.32, N174.81, N177.92 and N180.78 respectively.
But the ex-depot price for collection of petrol, as captured in the templates, remained at N133.28 per litre, indicating that the NNPC subsidised the commodity by an average of N47.5 per litre during the review period.
The NNPC has been the sole importer of petrol into Nigeria for more than two years, after oil marketers stopped importing the commodity due to crude price fluctuations and the halt in the payment of subsidy to oil dealers by the Federal Government.
Industry operators stated that the appreciation in crude oil prices would always lead to an increase in the amount spent as subsidy on petrol by the NNPC.
They noted that steps taken by the Organisation of Petroleum Exporting Countries had been impacting positively on the cost of crude oil in the international market, adding that the rise in price might be sustained till year end.
The Central Bank of Nigeria, in its economic report for November 2019, for instance, confirmed the appreciation in crude oil price