FG subsidises petrol import with N72bn in December 20I8

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By Tola Akinmutimi, Abuja

There are strong indications that Federal Government committed no fewer than N72   billion to under recovery cost on petrol imported into the country in December 2018

This figure is calculated on a conservative amount of N45 per litre subsidy on the 1.80 billion litres of fuel distributed by the Nigerian National Petroleum Corporation (NNPC) during the month.

The landing cost of the commodity per litre hovered on average of between N201 and N205 during the last quarter of 2018 and other distribution costs indicated that the corporation incurred at least N55 per litre under-recovery throughout the year.

The amount incurred as under-recovery (subsidy) by the corporation in October and November 2018 stood at N51.2 billion and N65.9 billion respectively while the international market price for Nigeria’s Bonny Light and Qua Iboe crude price average about $63 per barrel in December.

The National Bureau of Statistics (NBS) in its latest report ENtitled ‘Petroleum Products Imports and Consumption (Truck Out) Statistics’ published at the weekend indicated that the total volume of petrol imported to supplement local refining output in Q4,2018 stood a 5.32 billion litres.

The official statistics producing and reporting agency stated that 1.3 billion litres of diesel, 114.19 million litres of kerosene and 267.80 million litres of aviation fuel were imported during the period.

This is even as it confirmed  that 50.73 million litres of base oil, 42.38 million litres of bitumen; 10.63 million litres of Low Pour Fuel Oil (LPFO); and 331.78 million litres of domestic gas were imported in the three-month period ended December 2018.

Giving a breakdown of the products’ state-wide distribution during the review period, the agency indicated that 5.17 billion litres of petrol were distributed nationwide.

It reported further that 1.16 billion litres of diesel, 81.12 million litres of household kerosene, 256.73 million litres of aviation fuel and 137.53 million litres of domestic gas were distributed nationwide during the quarter under review.

It would be recalled that the NNPC had earlier reported that government incurred N623.17 billion on petroleum products supply under-recovery cost between January and November this year. The corporation submitted these figures to the Federation Account Allocation Committee (FAAC) during its monthly meeting in December 2018 in Abuja.

An analysis of the costs included under-recovery under the direct sale-direct purchase (DSDP) refining arrangement between January and November as well as the local refining cost between January and September this year.

The report indicated that cumulative outstanding under-recovery cost brought forward from 2017 stood at N78.4 billion, with arrears of about N67.23 billion, while total reimbursement or FAAC deduction was about N676.49 billion for the period under review.

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