The Federal Government, through the Nigerian National Petroleum Corporation(NNPC) spent N55.58 billion to subsidise Premium Motor Spirit (PMS) also known as petrol, in December 2019.
The Petroleum Products Pricing Regulatory Agency, PPPRA, the Nigerian petroleum downstream sector regulator, disclosed this in the data obtained yesterday.
According to PPPRA’s pricing templates for PMS, between December 1 and December 31, 2019, the Expected Open Market Price (EOMP) of petrol stood at an average of N176.4 per litre, meaning that at a regulated price of N145 per litre, the Federal Government paid an average of N31.4 per litre of the commodity as subsidy.
In addition, the volume of PMS supplied across the country, as obtained from the PPPRA’s Daily Truck-Out Reports for PMS for December 2019, revealed that 1.77 billion litres of PMS was supplied across Nigeria in the month under review, translating to an average daily PMS supply of 57.1 million litres.
Therefore, paying an average of N31.4 per litre on 1.77 billion litres, means that the federal government spent N55.28 billion to subsidise PMS for Nigerians in December 2019 alone.
The amount expended as subsidy on PMS in December 2019 represented 16.3 per cent of the N306 billion budgeted for fuel subsidy in the 2019 budget.
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 EOMP and amount incurred as subsidy in some selected days in December, the PPPRA reports declared that from December 2 to December 6, EOMP of PMS stood at N166.44 per litre, N165.98 per litre, N170.36 per litre and N171.12 per litre respectively, translating to subsidy of N21.44 per litre, N20.98 per litre, N25.36 per litre and N26.12 per litre respectively.
For December 9 and 12, EOMP, according to the PPPRA templates stood at N172.73 per litre and N172.92 per litre respectively, translating to subsidy of N27.73 per litre and N27.92 per litre respectively, while for December 16 to December 20, EOMP stood at N177.33, N77.32, N174.81, N177.92 and N180.22 per litre respectively, translating correspondingly to subsidy of N32.33 per litre, N32.32 per litre, N29.81 per litre, N32.92 and N35.22 per litre.
In addition, for December 23 and 24, the amount incurred as subsidy by the federal government stood at N35.78 per litre, N37.53 per litre respectively, as EOMP for those days respectively, stood at N180.78 per litre and N182.53 per litre, while for December 27, EOMP of PMS rose to N184.64 per litre, translating to subsidy of N37.53 per litre.
FG spent N12.7bn to subsidise fuel in five days The federal government expended N37.58 as subsidy per litre of PMS on 30th December, as EOMP stood at N182.58 per litre, while December 31, 2019, EOMP stood at N181.07 per litre, leaving the Federal Government to pay N36.07 per litre as subsidy on PMS.
Source: VON
