Petrol subsidy gulped N541bn in six months – NNPC

A total of N541.65 billion was expended on petrol subsidy between February and July 2021, the Nigerian National Petroleum Corporation has said.

This is contained in a document showing an NNPC’s presentation at the August 2021 Federation Account Allocation Committee meeting.

A breakdown of the petrol subsidy payments indicated that N25.37 billion was spent in February, N60.39 billion in March, and N61.96 billion in April.

The amount rose to N126.298 billion in May, N164.337 billion in June, and reduced to N103.286 billion in July.

The NNPC, which is currently the sole importer of petrol, has continued to bear the burden of underpriced sale of petrol of premium motor spirit (PMS).

The corporation has been deducting subsidy payments from oil and gas proceeds due to the three tiers of government.

Subsidy cost, according to the NNPC, prevented it from making any remittance to the FAAC in May.

The corporation deducted N126 billion in June; N114.3 billion in July; N170.4 billion in August from its remittance to FAAC in the aforementioned months.

The document showed that between January and August, the corporation made a contribution of N349.25 billion to the federal, state and local governments with a deficit of N1.12 trillion.

A breakdown of the FAAC remittances includes N90.86 billion in January; N64.16 billion in February; N41.18 billion in March; zero contributions in April; N38.61 billion in May; N47.16 billion in June and N67.28 billion in July.

It was also learn that the NNPC would deduct a total sum of N215.32 billion from its remittance to the FAAC in September.

“Out of the value shortfall of N143,286,281,752.62, the sum of N103,286,281,752.62 was applied on the gross domestic receipts before arriving at the net receipt of N67.28bn in order to make funds available for JV cost recovery to sustain the existing production level. The balance of N40bn will be deducted in subsequent months,” the NNPC document stated.

It also stated, “The July 2021 value shortfall of N175,317,701,294.80 & outstanding balance of N40bn will be deductible from the August 2021 proceeds due for sharing at the September 2021 FAAC meeting.”

Group Managing Director of the NNPC, Mele Kyari, had said the pump price of petrol should be N256 per litre as he disclosed that subsidy payments was gulping at least N140 billion monthly.