The amount spent as subsidy by the Federal Government on every litre of Premium Motor Spirit, popularly called petrol, consumed in Nigeria is currently above N600, oil sector operators stated on Sunday.

Also, the latest PMS evacuation data obtained from the Nigerian National Petroleum Company Limited on Sunday showed that the year-to-date daily consumption of petrol in Nigeria is 66.8 million litres. Going by the above figure from the NNPC, it therefore, implies that the Federal Government spends about N40.1bn daily when subsidising every litre of petrol consumed in Nigeria by at least N600. This also means that the government is spending about N1.243tn on fuel subsidy every month

Oil marketers told the correspondent that the cost of petrol (if not subsidised as done in Nigeria) is often higher than the cost of Automotive Gas Oil, popularly known as diesel. They said diesel price is currently between N800 and N850/litre, while the approved subsidised pump price of petrol had remained at N165/litre. Diesel is not subsidised.

Their position had earlier been confirmed severally by other operators in the oil sector, including NNPC’s Group Managing Director, Mele Kyari. Based on this, it implies that the Federal Government through NNPC currently spends nothing less than N600 as subsidy on every litre of petrol consumed across the country.

“The cost of petrol in Nigeria is about the cheapest in the world. And this is because of subsidy. The subsidy is not small, it is so great,” the Deputy National President, Independent Petroleum Marketers Association of Nigeria, Zarma Mustapha said. He added, “Diesel is going for about N850/litre currently because there is no subsidy on it. And this means petrol price should be almost same price if not for subsidy.”

Zarma explained that this humungous subsidy spending by the government through NNPC was unsustainable, stressing that the crisis in the downstream oil sector was now affecting retail outlets seriously.

NNPC has been the sole importer of petrol into Nigeria for several years. The oil firm has continued to shoulder the burden of subsidy over these years, a development that has been making it unable to make monthly remittances to the Federation Accounts Allocation Committee.

Also speaking on the burden of fuel subsidy on the economy, the President, Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, told our correspondent that the subsidy regime was no longer sustainable.

The National President, Natural Oil and Gas Suppliers Association, Bennett Korie, had told our correspondent that the current cost of petrol could make one to run away if told.

“You can not buy petrol at a high price and sell this low. Crude oil is about $130/barrel, the cost of fuel, if you hear it, you will run away; but you are selling at N165/litre. So definitely you do not expect money to remain for government to run other activities when it spends heavily on subsidy,” he stated.

Read more at: https://punchng.com/fg-spends-n1-243tn-monthly-as-fuel-subsidy-hits-n600-litre-operators/