The Federal Government, through the Nigerian National Petroleum Corporation, NNPC, said it spent a whopping N55.58 billion to subsidize Premium Motor Spirit, PMS, also known as petrol, in December 2019.
The data was obtained on Wednesday from the Petroleum Products Pricing Regulatory Agency, PPPRA, Nigeria's petroleum downstream sector regulator. According to PPPRA’s pricing templates for PMS, between December 1 and December 31, 2019, the Expected Open Market Price of petrol stood at an average of N176.4 per litre, meaning that at a regulated price of N145 per litre, the Federal Government paid an average of N31.4 per litre of the commodity as subsidy.
Relatedly, 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 were 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 N31.4 per litre on 1.77 billion litres, meant that the Federal Government spent N55.28 billion to subsidise PMS for Nigerians in December 2019 alone. The amount expended in subsidy on PMS in December 2019 represented 16.3 per cent of the N306 billion budgeted for fuel subsidy in the 2019 budget.
The Expected Open Market Price, 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 of today, the subsidy is borne by the NNPC on behalf of the federation. 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.