In the first 11 days in April, the Nigerian government spent an estimate of N99 billion as fuel subsidy on premium motor spirit (PMS) also known as petrol.
Analyses of data from the Nigerian National Petroleum Corporation (NNPC) showed that the landing cost for petrol totalled N234 per litre in the month of April, the same price it had maintained since March.
At an average of N129.6 billion spent on subsidy monthly, including February, the regulator’s data showed that an average of N9 billion daily is spent on subsidy.
This shows that N99 billion has been spent in the last 11 days as analysts have predicted an increase in the pump price of fuel in the coming months.
BizWatch Nigerian had reported in March that the Group Managing Director of NNPC, Mele Kyari, stated that petrol is being subsidized at the cost between N100 billion and N120 billion monthly basis while speaking at special Ministerial Briefing in Abuja.
According to Kyari, NNPC absorbs the cost differential which is recorded in its financial books adding that while the actual cost of importation and handling charges amounts to N234 per litre.
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He said in spite of this, the government is selling at N162 per litre to marketers, pointing out that market forces must be allowed to determine the pump price of petrol in the country.
He, however, added that government was being considerate of the actual impact of the price increase on Nigerians.
Since January the price of the international oil benchmark, Brent crude, has been on an upward trajectory, rising from $41.51 per barrel to close at $70 per barrel on March 8.
Fuel marketers had in December expected another upward adjustment of PMS prices to reflect the further rise in crude oil prices.
The NNPC GMD said the corporation could no longer bear the burden of the product currently being sold at N162 per litre.
