FG spent N108. 127bn on subsidy in two months

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CBN

Olusola Bello
The Federal Government through the Nigerian National Petroleum Corporation (NNPC) spent N108.127 billion  as subsidy on Premium Motor Spirit or petrol  in the months of  January and February  2021 .
A breakdown of the expenditure indicates that in February alone, the NNPC  spent N73.123 billion  on imported  petrol. While the amount spent in January was put at N23billion.
Business Standards investigations revealed that the amount spent in March would certainly be much higher than the figures  that is currently available  because the price of crude  oil has been consistently on the rise.
The wide gap between what was spent in January and February has to do with the increase in the price of crude oil at the international oil market rising above $50 per barrel.
Industry observers have attributed this this situation to the huge cost associated with importation of petrol imported into the country.
The average crude oil price in January 2021 was $57 per barrels while that of February was $62 per barrel.
A huge part of the revenue realized by NNPC in these months were ploughed back to import Petrol which price is often influenced  by  the price of crude oil.
The landing cost of the commodity is put at around N189.61 per litre, comprising the litre; bridging fund of N7.51 per litre and Marine Transport Average of N0.15. It  was  noted that various margins brought
addition to the ex-coastal price, of average lightering expenses, Nigeria Port Authority Charges, NIMASA charges, jetty throughput charges, storage charge and average financing cost of N4.81, N2.49, N0.23, N1.61, N2.58 and N2.17 per litre respectively. It further added the wholesalers’ margin of N4.03 per litre; administrative charge of N1.23 per litre; transporters’ allowance of N3.89 per
The actual price at pump price is fixed at N162 per litre
Mele Kyari, Group managing director of NNPC had said that the  country can not  to  subsidise  fuel , the corporation  would for not  not change the price  until all the  negotiations and meeting about  fuel price are concluded. He acknowledged  the fact that the price of fuel across the borders of the country ranges between N300 t0 N500 per litre.
Also, Dan Kunle, an energy expert, said the country  cannot continue  this  way, else, it would run into trouble very soon.
He commended the NNPC group Managing director for making a bold step towards deregulation of the downstream of the petroleum  Industry.
NNPC had issued on March 1 issued a statement that it is not increasing the Ex-depot price in the month of March and that is what it is. This was reported that the government had completely hands over from the downstream sector of the  Petroleum Industry, with  an estimated price of over  N200  per litre
“There is no need for panicking and I can tell you from our own point of view that we will not increase the pump price of petrol and we are still standing by that March 1 decision. “We have sufficiency of product in the country and there is really no need for the public to panic. Like I have stated, the ex-depot price for the NNPC is still at it is, it has not increase and it will not increase in this month of March,’’  Kennie Obateru, Group  General Manager, Public Affairs NNPC  said.

Petroleum Products Pricing Regulatory Agency ( PPPRA) on its website on March 11, fixed the pump price of petrol, at N212.61 per litre, for the month of March in its PMS guiding price template and said it would run from March 1 to March 31
The landing cost of the commodity is put at around N189.61 per litre, comprising the litre; bridging fund of N7.51 per litre and Marine Transport Average of N0.15. It noted that various margins brought
addition to the ex-coastal price, of average lightering expenses, Nigeria Port Authority Charges, NIMASA charges, jetty throughput charges, storage charge and average financing cost of N4.81, N2.49, N0.23, N1.61, N2.58 and N2.17 per litre respectively. It further added the wholesalers’ margin of N4.03 per litre; administrative charge of N1.23 per litre; transporters’ allowance of N3.89 per

The landing cost of the commodity  is put at around N189.61 per litre, comprising the litre; bridging fund of N7.51 per litre and Marine Transport Average of N0.15. It noted that various margins brought
addition to the ex-coastal price, of average lightering expenses, Nigeria Port Authority Charges, NIMASA charges, jetty throughput charges, storage charge and average financing cost of N4.81, N2.49, N0.23, N1.61, N2.58 and N2.17 per litre respectively. It further added the wholesalers’ margin of N4.03 per litre; administrative charge of N1.23 per litre; transporters’ allowance of N3.89 per

The  landing cost of the commodity  is put at around N189.61 per litre, comprising the litre; bridging fund of N7.51 per litre and Marine Transport Average of N0.15. It noted that various margins brought
addition to the ex-coastal price, of average lightering expenses, Nigeria Port Authority Charges, NIMASA charges, jetty throughput charges, storage charge and average financing cost of N4.81, N2.49, N0.23, N1.61, N2.58 and N2.17 per litre respectively. It further added the wholesalers’ margin of N4.03 per litre; administrative charge of N1.23 per litre; transporters’ allowance of N3.89 per

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