HomeBusinessPetrol Subsidy Now N1trn As NNPC Paid N163bn In October

Petrol Subsidy Now N1trn As NNPC Paid N163bn In October

Petrol Subsidy Now N1trn As NNPC Paid N163bn In October

 

Subsidy payment being made by the Nigerian National Petroleum Company Limited (NNPC) on Premium Motor Spirit (PMS), otherwise called petrol, hit the N1 trillion mark in October after the national oil firm paid N163 billion to keep the product within the N162 to N165 price band.

This was contained in NNPC’s Federation Accounts Allocation Committee (FAAC) report for September.

NNPC Limited is the sole importer of petrol at present and usually uses generated revenue to subsidise costs incurred during imports that could affect the domestic retail price of the product.

While it tags the monthly petrol subsidy as ‘Under-recovery of PMS/Value shortfall’, it deducts the sum upfront from the monthly remittances of oil proceeds it makes to the Federation Accounts Allocation Committee (FAAC), which is shared by the federal government and the 36 states of the federation.

From the latest records, NNPC Ltd has spent N1.027.783tr on petrol subsidy in nine months of this year – February to October. It paid N163.709bn as subsidy in October, the report stated.

The highest subsidy NNPC has paid this year is N173.132bn in August which is still not up to the N200bn

NNPC spent N25.37bn in February rising to N60.396bn by March. It spent N61.966bn in April doubling to N126.298bn in May. The national oil company further incurred a higher cost in petrol subsidy of N164.337bn in June which dropped to N103.286bn by July.

By August, the subsidy cost rose to N173.132bn, and dropped to N149.283bn in September and rose to N163.7bn in October.

A statement yesterday from NNPC also said it has raised its stock capacity from 1.7bn litres of petrol to over 2bn to ensure supply flow is not disrupted during the yuletide period.

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