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NNPC Spends N206.6bn on Fuel Subsidy in Two Months

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NNPC
  • NNPC Spends N206.6bn on Fuel Subsidy in Two Months

The Nigerian National Petroleum Corporation (NNPC) reported that the cost of subsidising Premium Motor Spirit, popularly know as petrol, for Nigerians rose more than 1,174 per cent in the first two months of the year.

The report released on Thursday showed that a total of N206.59 billion was spent on subsidy in January and February 2019, more than N16.21 billion spent for the same purpose in November and December of 2018 when demands were generally high.

While the NNPC classified this expenditure as under-recovery, as it claimed only the National Assembly could approve subsidy, the amount is the additional cost incurred in subsidising the price of petrol for Nigerians, even when the real market price is more than the regulated price of N145 per litre.

A breakdown of the report showed the NNPC recorded under-recovery of N104.35 billion in January 2019, representing an increase of N91 billion or 682 percent from N13.34 billion achieved in December 2018.

In February, the amount dropped by 1.9 percent or N2.01 billion to N102.338 billion, an increase of N99.46 billion when compared to N2.88 billion recorded in November as under-recovery.

Further analysis from the corporation’s Monthly Financial and Operations Report for May 2019 revealed that the difference between the amount spent on subsidy in January/February 2019 and November/December 2018 was N190.37 billion.

On Tuesday, the Senate set up a committee to investigate the activities of NNPC regarding fuel subsidy.

According to the upper chamber, despite billions being spent on refineries yearly and about 43 new modular refineries licensed to boost local productions, Nigeria still imports 90 percent of her refined petroleum products.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.