By Adewale Sanyaolu
Strong indications have just emerged that the N4 trillion set aside by the Federal Government for fuel subsidy in 2022 budget may eventually hit N7.372 trillion by year end as Daily Sun investigations has revealed.
This was as the Nigerian National Petroleum Company Limited (NNPCL) in a post on its verified Twitter Handle yesterday, pegged Nigeria’s average Premium Motor Spirit (PMS), popularly called petrol supply at 68 million litres per day.
The firm also put the average subsidy on petrol at N297 per litre and an annual estimate of N6.5 trillion on the assumption of 60 million litres per day.
The Federal Government had set aside N443 billion for fuel subsidy in 2022 but later returned to the National Assembly for an incremental expense from N443billion which it had planned up to N4 trillion.
If the current estimate of 68 million per day figure by the NNPC is sustained, Nigeria would have spent N7.372 trillion by December 31, 2022(68 million litres/day multiplied by N297/litres in 365 days gives N7.372 trillion Naira) which is an increase of N3.372 trillion over the N4 trillion budget.
NNPC added that between January and August 2022, the total volume of petrol imported into the country was 16.46 billion litres, which translates to an average supply of 68 million litres per day.
Similarly, it said import in the year 2021 was 22.35 billion litres, translating to an average supply of 61 million litres per day.
‘‘The NNPC notes the average daily evacuation (Depot truck out) from January to Auguest stands at 67 million litres per day as reported by the Nigerian Midstream and Downstream Petroleum Regulatory Authourity (NMDPRA).
Daily Evacuation(Depot load outs) records of the NMDPRA do carry daily oscillation ranging from as low as four million litres to as high as 100 million litres per day.”
The company further pointed out that rising crude oil prices and PMS supply costs above PPPRA(now NMDPRA) cap had forced oil marketing companies’ (OMCs) withdrawal from PMS import business since the fourth quarter of 2017.
In the light of these challenges, NNPC said it remained the supplier of last resort and continues to transparently report the monthly PMS cost under-recoveries to the relevant authorities.
The importer of last resort disclosed that the average Q2 2022 international market determined landing cost was $1,283 per metric tonne and the approved marketing and distribution cost of N46/litre. The combination of these cost elements translating to retail pump price of N462/litre and an average subsidy of N297 and an annual estimate of N6.5 trillion on the assumption of 60 million litres daily PMS supply, adding that this will continuously adjusted by market and demand realities.
NNPC, however, said it recognises the impact of maritime and cross border smuggling of PMS on the overall supply framework, noting it equally acknowledges the possibilities of other criminal activities in the PMS supply and distribution value chain.
‘‘We will continue to deliver on our mandate to ensure energy security for our country with integrity and transparency. We invite any forensic of the PMS supply and subsidy management framework of the NNPC.”