Federal Government's subsidy on petrol hits N2.4bn daily from N774mil

The Federal Government's subsidy on fuel has risen to N2.4 billion daily in May, from N774 million in March, 2018, also as a result of the high price of crude oil in the international market, Vanguardngr reports.


Unlike in March, this year, when the price of crude oil hovered at $66 per barrel, it had hovered between $75 and $80 per barrel since last month, thus pushing up landing cost of the refined product in the domestic markets for finished product importers like Nigeria.

In a report obtained by Vanguardngr, the Petroleum Products Pricing Regulatory Agency, PPPRA, stated that without the government subsidy, the price of petrol could have been as high as N205 per litre in the domestic market.


According to PPPRA, the price of the commodity appreciated by 8.47 per cent from N189 per litre recorded in April 25, 2018 to N205 per litre as at May 16, 2018.

Price of petrol is still fixed at a maximum of N145 per litre, meaning that the NNPC is currently paying N60 as under recovery for a litre of the commodity.


Speaking on this issue, the Group General Manager, Group Public Affairs Division of the NNPC, Mr. Ndu Ughamadu said: “The explanation is simple. The higher the price of crude oil the higher the price of petroleum products in the international market. It should also be noted that this has also impacted on the landing cost, and by extension our under recovery.”

In a related development, findings in Ogun state and other border communities showed that the situation is worsened by smuggling, as NNPC is now forced to subsidize the product for neighboring countries.