Petrol subsidy payments gulped N1.43 trillion in 2021, shrinking revenue accrued to the federation account to N542 billion — a shortfall from the projected N2.51 trillion.
Subsidy or under-recovery is the underpriced sales of premium motor spirit (PMS), better known as petrol.
The details are contained in the Nigerian National Petroleum Corporation (NNPC) presentation to the Federation Account Allocation Committee (FAAC) meeting between January 19 and 20, 2022.
The document exclusively obtained by TheCable showed that Nigeria spent a total of N270.83 billion to cater for the cost of petroleum shortfall in December 2021.
This was the highest cost for the PMS shortfall in the year.
In November and October, fuel subsidy payments stood at N131.4 billion and N163 billion, respectively, according to checks by TheCable.
In September, it was 149.28 billion. In August, the under-recovery cost of PMS was N173.13 billion. For July and June, it was N103.28 billion and N164.33, respectively.
In May, the cost of fuel subsidy amounted to N126.29 billion.
Also, in April, March, and February, the under-recovery of PMS amounted to N61.96 billion, N60.39 billion, and N25.37 billion, accordingly.
In January, there was no record for under-recovery.
SUBSIDY PAYMENTS IMPACTED NNPC REVENUE
According to an analysis by TheCable Index, the corporation had been deducting from oil revenue to fund the unpriced sales of petrol to Nigerians, affecting revenue projects for the three tiers of government and developmental projects.
It only remitted N20.1 billion to the federation account in the month under review.
In its presentation to FAAC, NNPC said its annual gross revenue projection of N4.979 trillion for 202 dropped by N1.55 trillion to N3.43 trillion for the year.
POLITICS AND POLICIES OF SUBSIDY REMOVAL
Ahead of the 2023 elections, the federal government is confronted with policies and politics of fuel subsidy removal despite provisions for deregulation in the Petroleum Industry Act.
In a Twitter Space conducted by TheCable on Thursday, participants said subsidy removal is long overdue but expressed fear over commitments by the government to lessen the impact on poor Nigerians.
The National Economic Council ad-hoc committee interfacing with the Nigerian National Petroleum Corporation (NNPC) on the appropriate pricing of PMS had also submitted its recommendations.
TheCable had reported that the committee recommended raising the petrol pump price by about N130/140 per litre — from the current N162 to N302 per litre by February.
According to the committee, the new price proposal will allow the government to fully deregulate the market, eliminating monthly subsidy payments and ensuring fair competition.
While NEC said it is still considering the recommendations, Ahmad Lawan, senate president, had said Buhari did not direct the removal of petrol subsidy, saying their “constituents are raising concerns over the policy”. (The Cable)
