*Petrol attendant dispensing fuel to a car at a filling station
The Federal Government, under President Muhammadu Buhari through the Nigerian National Petroleum Corporation (NNPC), spent a staggering ₦55.58 billion to subsidise Premium Motor Spirit (PMS), commonly known in Nigeria as petrol, in December 2019. This development was made known to Nigerians by the Petroleum Products Pricing Regulatory Agency (PPPRA), the Nigerian petroleum downstream sector regulator in a data obtained yesterday by journalists.
PPPRA’s pricing templates for PMS, between December 1 and December 31, 2019, revealed that the Expected Open Market Price (EOMP) of petrol stood at an average of ₦176.4 per litre, meaning that at a regulated price of ₦145 per litre, the Federal Government paid an average of ₦31.4 per litre of the commodity as subsidy.
Additionally, the volume of PMS supplied across the country, as obtained from the PPPRA’s Daily Truck-Out Reports for PMS for December 2019, revealed that 1.77 billion litres of PMS was supplied across Nigeria in the month under review, translating to an average daily PMS supply of 57.1 million litres. Therefore, paying an average of ₦31.4 per litre on 1.77 billion litres, means that the federal government spent ₦55.28 billion to subsidise PMS for Nigerians in December 2019 alone.
Therefore, the amount expended as subsidy on PMS in December 2019 represented 16.3 per cent of the ₦306 billion budgeted for fuel subsidy in the 2019 budget. The EOMP of petrol is the price the commodity is expected to be sold to motorists if the government stops paying subsidy on the commodity. However, as at today, subsidy is borne by the NNPC on behalf of the Nigerian government under President Muhammadu Buhari of the ruling All Progressive Congress (APC). Incidentally, the APC led the campaign against former President Goodluck Jonathan over the same subsidy.
The NNPC, which is currently the sole importer of PMS into the country, bears the cost of subsidizing the commodity and deducts the cost from earnings from its domestic sale of crude oil and gas, before making remittances to the Federation Account. Giving a breakdown of the EOMP and amount incurred as subsidy in some selected days in December, the PPPRA reports declared that from December 2 to December 6, EOMP of PMS stood at ₦166.44 per litre, ₦165.98 per litre, ₦170.36 per litre and ₦171.12 per litre respectively, translating to subsidy of ₦21.44 per litre, ₦20.98 per litre, ₦25.36 per litre and ₦26.12 per litre respectively.
As for December 9 and 12, EOMP, according to the PPPRA templates stood at ₦172.73 per litre and ₦172.92 per litre respectively, translating to subsidy of ₦27.73 per litre and ₦27.92 per litre respectively, while for December 16 to December 20, EOMP stood at ₦177.33, ₦77.32, N174.81, ₦177.92 and ₦180.22 per litre respectively, translating correspondingly to subsidy of ₦32.33 per litre, ₦32.32 per litre, ₦29.81 per litre, ₦32.92 and ₦35.22 per litre.
In addition, for December 23 and 24, the amount incurred as subsidy by the federal government stood at ₦35.78 per litre, ₦37.53 per litre respectively, as EOMP for those days respectively, stood at ₦180.78 per litre and ₦182.53 per litre, while for December 27, EOMP of PMS rose to ₦184.64 per litre, translating to subsidy of ₦37.53 per litre. The federal government expended ₦N37.58 as subsidy per litre of PMS on 30th December, as EOMP stood at ₦N182.58 per litre, while December 31, 2019, EOMP stood at ₦181.07 per litre, leaving the Federal Government to pay ₦36.07 per litre as subsidy on PMS.