Petrol subsidy gulps N2.6trillion so far this year, as NNPC again declares zero FAAC remittance

The Nigerian National Petroleum Company (NNPC) Limited has spent N2.565 trillion on petrol subsidy payments since the beginning of this year, an analysis has revealed.

According to the national oil company, in its monthly presentation to the Federation Account Allocation Committee (FAAC) meeting yesterday, it deducted N525.71 billion as a shortfall for the importation of petrol (subsidy) in August, 2022.

Subsidy or under-recovery is the under-priced sales of premium motor spirit (PMS), otherwise known as petrol.

The FAAC document showed that due to the subsidy payment, the oil company failed to remit any funds to the Federation Account for the eighth consecutive time.

Petrol subsidy has remained a controversial issue in Nigeria, as spending continues to deplete the country’s revenue. In January, February, March, and April 2022, the petrol subsidy gulped 210.38 bn, N219.78 bn, N245.77 bn, and N271.13 bn, respectively. Also, in May, June, and July, the country spent N327.07 bn and N319.18 bn, and N448.78 bn, respectively.

Recall that this year, the Federal Government plans to spend up to N4 trillion on costly petrol subsidies due to high global oil prices. However, it said that it plans to stop subsidy payments by June next — with plans to spend N3.35 trillion, as contained in the 2023-2035 Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP).

The oil company said it recorded an overall crude oil lifting of 8.49 million barrels (export and domestic crude) in July 2022, representing a 16.78% increase when compared to the 7.27 million barrels it lifted in June 2022.

“Production in July 2022 averaged 1.183 barrels per day (OPEC)”, it added.

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