Petrol Subsidy Hits N1.35tn In Four Months, NNPC To Deduct N672bn

New Price of Petrol

The subsidy on Premium Motor Spirit, popularly called petrol, between January and March 2022 has risen to N675.93bn, the latest data obtained from the Nigerian National Petroleum Company Limited (NNPC) on Wednesday showed.

Also, the NNPC has informed the Federation Account Allocation Committee (FAAC) that it will deduct the sum of N671.88bn from April 2022 proceeds due for sharing at the May 2022 FAAC meeting.

It described the N671.88bn as a value shortfall incurred by the NNPC. The oil firm has remained the sole importer of petrol into Nigeria and subsidises the commodity using billions of naira monthly. NNPC in Abuja showed that the oil firm spent N210.38bn, N219.78bn and N245.77bn as subsidies on petrol in January, February and March 2022, respectively.

This implies that the oil company had spent N675.93bn within the three months on PMS subsidy. NNPC described its subsidy spending as an under-recovery of PMS/value shortfall.

Meanwhile, in its presentation to FAAC during the committee’s April 26, 2022 meeting, NNPC told the committee members it would deduct over N671bn at their next meeting in May.

It said, “The estimated value shortfall of N671,882,996,685.81 (consisting of N519bn for estimated April 2022 recovery plus N152bn of March 2022) is to be recovered from April 2022 proceeds due for sharing at the May 2022 FAAC meeting.”

The oil firm further told FAAC that the overall NNPC crude oil lifting of 9.77 million barrels (export and domestic crude) in February 2022 recorded a 1.71 per cent decrease relative to the 9.94 million barrels lifted in January 2022.

“Nigeria recorded 1.258million barrels per day production in February 2022 (OPEC),” NNPC stated in its presentation to FAAC. It noted that crude oil export revenue received in March 2022 amounted to $88.93m, as gas export revenue received in March 2022 amounted to $32.04m.

NNPC stated that for domestic crude and gas sales, the sum of N259,539,170,912.93 was the gross domestic crude oil and gas revenue for March 2022.

It further added that the value shortfall of N245,772,559,462.62 was charged for the month, which comprises the previous month’s great and part of the February 2022 value shortfall.

Monetary deductions by NNPC from FAAC had continued to deplete the funds being shared at the meeting, as these deductions were due to massive subsidy spending shouldered by the national oil company.

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