In January Nigeria spends N43 billion to subsidise petrol

The Federal Government, through the Nigerian National Petroleum Corporation, NNPC, paid N43.09 billion as subsidy on Premium Motor Spirit, PMS, also known as petrol, in the month of February 2020, according to data obtained from the Petroleum Products Pricing Regulatory Agency, PPPRA.

The amount paid as subsidy in January 2020 represented a decline of 22.47 per cent when compared with the N55.58 billion paid by the Federal Government to subsidise the commodity in December 2019.

Figures gleaned from the PPPRA’s PMS Pricing Templates and Daily Truck-Out Reports for January 2020, put the average Expected Open Market Price, EOMP, of PMS at N171.27 per litre, meaning that at a regulated price of N145 per litre, the Federal Government paid an average of N26.27 per litre as subsidy on fuel in January.

In addition, the PPPRA reports stated that a total of 1.591 billion litres of petrol was supplied across Nigeria in 30 days out of the 31 days in the month under review, translating to an average daily PMS supply of 53.033 million litres.

Therefore, paying an average of N26.27 per litre on an average PMS supply of 1.591 billion litres, meant that the federal government spent N43.09 billion to subsidise PMS for Nigerians in January 2020 alone.

The amount expended as subsidy on PMS in January represented 9.58 per cent of the N306 billion budgeted for fuel subsidy in the 2020 budget of the Federal Government.

The EOMP of petrol is the price the commodity is expected to be sold to motorists if the government stops paying subsidy on the commodity. However, as at today, subsidy is borne by the NNPC on behalf of the federation.

The NNPC, which is currently the sole importer of PMS into the country, bears the cost of subsidizing the commodity and deducts the cost from earnings from its domestic sale of crude oil and gas, before making remittances to the Federation Account.

Giving a breakdown of the Expected Open Market Price of the commodity and the amount incurred as subsidy in days the pricing templates were published, the PPPRA stated that for January 2, 3, 6, 7, 9 and 10, EOMP of PMS stood at N182.05 per litre, N182.28 per litre, N183.50 per litre, N179.50, N172.93 per litre and N174.52 per litre respectively, translating to subsidy of N37.05 per litre, N37.38 per litre, N38.50 per litre, N34.50 per litre, N27.93 per litre and N29.52 per litre.

For January 13 to 17, EOMP of PMS stood at N173.89 per litre, N173.95 per litre, N172.49 per litre, N173.81 per litre and N171.77 per litre respectively; leading to subsidy of N28.89 per litre, N28.95 per litre, N27.49 per litre, N28.81 per litre and N26.77per litre respectively.

In addition, EOMP of N172.76 per litre, N173.84 per litre, N170.60 per litre, N167.56 per litre and N163.75 per litre were recorded from January 20 to 24, translating to subsidy of N27.76 per litre, N28.84 per litre, N25.60 per litre, N22.56 per litre and N18.75 per litre respectively.

For December 27 to 31, the Federal Government incurred subsidy of N14.86 per litre, N17.53 per litre, N18.49 per litre, N16.15 per litre, and N15.45 per litre respectively, from EOMP of PMS of N159.86 per litre, N162.53 per litre, N163.49 per litre, N161.15 per litre and N160.45 per litre.

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