FG spent N3.053bn per day in August

By Chineme Okafor in Abuja



Petrol supply figures sighted by THISDAY yesterday in Abuja indicated that the amount of financial subsidy Nigeria currently absorbs to keep the pump price of petrol at N145 per litre instead of the expected open market price might have gone up to N65.6k.

This is following the rising price of crude oil in the international market and its impacts on the landing cost of petrol into the country.

Oil last week traded at an average of $80 per barrel, but the paper in Abuja gathered from operators in Nigeria’s downstream petroleum sector that the landing cost of a litre of petrol had similarly gone up to N196.3k per litre.

Based on this, THISDAY summed up the N14.3 distribution margin approved in the last pricing template for petrol by the Petroleum Products Pricing Regulatory Agency (PPPRA) – an agency of the federal government responsible for periodically calculating and approving products’ pricing for the market – with the N196.3k landing cost, and arrived at N210.6k, which should be the current open market price of a litre of petrol in the country.

Flowing from this, it then calculated the difference between N210.6k (actual market price per litre) and N145 (government price per litre) and arrived at N65.6k, which is the subsidy or under-recovery recorded over every litre of petrol supplied by the Nigerian National Petroleum Corporation (NNPC), which has since October 2017 reportedly become the sole importer of petrol in Nigeria.

Further on this, the paper multiplied the N65.6k by 46.54 million litres the ministry of petroleum resources disclosed last week in its newsletter was the daily petrol consumption level of the country in August and arrived at N3,053,024,000 which was the figure the country may have incurred daily as subsidy on petrol consumption.

Additionally, for a period of 31 days in August, the calculations indicated that N94,643,744,000 could have been absorbed as subsidy by the NNPC to keep the pump price at N145 per litre.

Though the NNPC did not confirm the figures, its Group General Manager, Public Affairs, Mr. Ndu Ughamadu, however, explained to THISDAY that it has the financial capacity to absorb any gap between the landing costs and pump price of petrol in the country.

Ughamadu equally stated that the NNPC would continue to shoulder such burden to keep petrol supplies stable for all Nigerians.

“As it stands, the NNPC is currently playing the role of a ‘social supplier’ with reference to petrol. The NNPC has the financial capacity to absorb any gap between the landing cost and prevailing pump price of petrol,” said Ughamadu.

He added, “The corporation, therefore, will continue to shoulder associated losses in order to ensure adequate and robust supply of petroleum products to consumers and all Nigerians.”

In December 2017 when oil price was $64.37 per barrel, the NNPC’s Group Managing Director, Dr. Maikanti Baru, disclosed to journalists that the landing cost of petrol was N171.40, and that a metric tonne cost $620.

Similarly, Baru explained that NNPC’s crude for product swap programme – the Direct Sales Direct Purchases (DSDP) – was under pressure and unable to satisfy increased petrol consumption in the country because it was originally programmed to meet the country’s 35 million litres daily consumption level.

He particularly stated then that: “The landing cost goes with the CIF (Cost, Insurance and Freight) price of petrol. As of Friday, the CIF price was in the neighbourhood of $620 per metric tonne, with the official exchange rate of N305 to the dollar, the landing cost should be N171.40 per litre.

“The government has consistently indicated that the N145 per litre is the price and to do that, it has mandated the NNPC to keep the equivalent depot price of N133.28 per litre which will keep a cap of N145 per litre, there is a lot of profit in between after taking the transportation cost of N7 off, so there is sufficient margin for the marketers in that PPPRA template at the price cap.”

https://www.thisdaylive.com/index.php/2018/09/17/high-oil-price-pushes-subsidy-on-petrol-to-n65-6-per-litre/amp/

Another APC distraction.

Ye paripa!


Fuel Subsidy is a SCAM - M. Buhary

In few years, the oil well will dry up then una eyes go clear.

Smh

sarrki go urinate

you no go see them for this thread

Shame on APC

Them dey use us play

its only in Nigeria that the economics of oil price to consumer and subsidy is always complicated.


when Oil price was high in the market. it will increase the price in our country when there is a lower oil price in the market,it will still increase our local sales of oil.

so its difficult to know what to pray for when it comes to oil sector.

We don accept our wahala i swear.

This singular news has vindicated GEJ's payment of subsidy. Imagine how much that man paid when the price was about 111 - 120 USD per bbl

Our Petroleum Minister is a lying something...

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corruption is indeed fighting back.

they want tell us another story again oh.

subsidy scam to fund 2019 election again oh.

when oil price dropped there was problem.. right. everything was blamed on oil Price drop.. but right now oil prices went up still there is a problem. the blame still continue on oil price increase.. Nigerian my people which way?

What an irony! When oil price rise up in the global market instead of Nigerians to be happy but here are we paying heavy premiums on subsidy. Up till this moment we are still importing refined fuel. Who did this to us as a country?

What is Subsidy? ... Buhari 2014.

At this rate, if fuel price moves to $120 as with GEJs government, Subsidy on patrol would be almost N200.

My greatest regret in life is formally supporting this Buhari government.

Nigerians enjoy your change.

We voted this administration hoping oil subsidy can be thing of the past but here are we. Its really pathetic and pitiable seeing my country put all their hopes in dangote refinery.

ok

Let FG Experiment with 300/Liter and let's see the idiots always saying negative shuuut abut Buhari groan some more

Useless country

Can anything good come out of this country? The oil God gave us willingly, we can't still manage well

Are we supposed to celebrate

Lol

what subsidy again? thought it ended with Jonathan regime. Apc jokers.

We used to have one Minister called Ibe Kachukwu?
So there is subsidy?

If the price goes up na wahala,

Still yet, similarly if the price goes down problem!

APC IS A SCAM

This has become their cash cow... Inflated figures everywhere...

Ok.... subsidy again??

Even in government of change??