According to the latest data from the Nigerian National Petroleum Corporation (NNPC), the corporation spent a total of N905.27bn on petrol subsidy which it refers to as ‘value shortfall’ or ‘under-recovery’ in eight months amid rising global oil prices.
The landing cost of imported petrol and subsidy are expected to increase with the international oil benchmark, Brent crude, nearing $80 per barrel on Monday (up 2.07 per cent at $79.71 per barrel as of 7:00pm Nigerian time).
The subsidy resurfaced in January this year as the government left the pump price of petrol unchanged at N162-N165 per litre despite the increase in global oil prices.
In March 2020, the Federal Government had removed petrol subsidy after reducing the pump price of the petrol to N125 per litre from N145 following the rapid drop in crude oil prices.
The NNPC, which has been the sole importer of petrol into the country has been bearing the subsidy cost since it resurfaced.
The corporation said that it incurred N25.37bn subsidy cost in January, N60.40bn in February, N111.97bn in March, and N126.30bn in April and N114.34bn in May.
It also said the subsidy cost increased from N143.29bn in June to N175.32bn in July but fell to N149.28bn in August.
“The August 2021 value shortfall of N149,283,084,869.20 is to be deducted from the September 2021 proceeds due for sharing at the October, 2021 FAAC meeting,” it stated.