Indications have emerged that Nigeria may lose an estimated N20 billion to Cameroon and Chad if Federal Government continues subsidy payment.
This loss , which is an offshoot of the diversion of petroleum products meant for local consumption to the neighboring countries, is in the form of paid subsidies to oil marketers, according to investigations by Daily Independent.
Nigeria loses 30 percent of its daily 40 million litres of petrol to fuel diversion, it was learnt.
With the Federal Government still inconclusive over the removal of the subsidy after initial grandstanding against the policy, the anticipated loss of sustaining the subsidy is N7 billion in the quarter in addition to more than N13 billion being lost in phantom imports of the products by marketers.
Government says that it intends to pay the subsidy money with proceeds of N10 billion realised between January and March as a result of selling the product above the expected open market price.
According to Petroleum Product Pricing Regulatory Agency (PPPRA) template, the expected open market price of the PMS had risen to N99.38 per litre for independent and major oil marketers and N98.62 per litre for NNPC retail outlets. PPPRA said that the expected open market price was the actual price of the product without subsidy and it was based on the current exchange rate of N197 to a dollar.
PPPRA says that at the current price of N86 per litre at NNPC retail outlets, the Federal Government was paying N12.62 per litre as subsidy on the product and N12.88 per litre as subsidy for other oil marketers’ price of N86.50.
Using Nigeria’s estimated daily fuel consumption of 40 million litres per day, this translates to subsidy payment of about N515.2 million daily.
This will also mean that Federal Government would pay N15.46 billion in one month and N46.38 billion over a three-month period.
