Fuel subsidy, refinery rehabilitation gulped N1.3tn in five months, Says NNPC

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The amount spent as subsidy on Premium Motor Spirit, popularly called petrol, and on refinery rehabilitation between January and May this year was N1.301tn, figures released on Monday by the Nigerian National Petroleum Company Limited showed.

NNPC disclosed this in its latest presentation to the Federation Account Allocation Committee meeting for June 2022.

The bulk of the oil firm’s spending was on petrol subsidy, as it consumed N1.274tn during the five months, while for refinery rehabilitation, NNPC spent N9.11bn in each of January, March, and April, amounting to N27.33bn.

An analysis of NNPC’s monthly fuel subsidy spending indicated a continuous rise in the amount incurred as subsidy by the Federal Government through NNPC.

Data from the national company showed that N210.38bn, N219.78bn, N245.77bn, N271.59bn, and N327.1bn were used in subsidizing PMS in January, February, March, April, and May 2022 respectively.

NNPC is the sole importer of petrol into Nigeria for several years running. Nigeria’s four refineries are not working, though the Port Harcourt refinery is currently under rehabilitation.

The national oil company refers to its subsidy spending as under-recovery/value shortfall and deducts it every month before making any remittance to FAAC, a development that has stopped NNPC from remitting anything to the Federation Account this year.

In its latest presentation to FAAC, the oil firm also informed the committee that it would deduct N845.15bn from what would be shared by the committee next month.

“The value shortfall on the importation of PMS recovered from May 2022 proceeds is N327,065,907,048.06, while the outstanding balance carried forward is N617bn,” NNPC stated.

It added, “The estimated value shortfall of N845,152,863,012.97 (consisting of arrears of N617bn plus estimated May 2022 value shortfall of N227,721,200,478.23) is to be recovered from June 2022 proceed due for sharing at the July 2022 FAAC meeting.”

The amount spent on petrol subsidy monthly has been depleting the revenues accruable to the Federation Account and limiting the funds being shared by the three tiers of government.