Nigeria To Subsidise Local Consumption Of Fuel With N750.81 Bln In 2020
Nigeria will spend about N750.81 billion to subsidise fuel consumption next year, this is according to data from the Petroleum Products Pricing Regulatory Agency (PPPRA).
The government of President Mohammadu Buhari was not inclined to admit the payment of subsidies on local consumption of fuel since its inception in 2015.
However, the state-owned oil firm, the Nigerian National Petroleum Corporation (NNPC) has consistently carried the burden of petrol subsidy through a price recovery mechanism.
Finance and budget minister Zainab Ahmed had said the government made provisions for N450 billion in the next year budget for ‘under-recovery’ of cost of fuel import, short of the projection by the PPPRA.
The ‘under-recovery’ of cost is expected as usual to be borne by the state-oil corporation as a component of its operational cost.
“A provision has been made in the budget for under-recovery for the PMS in the sum of N450bn provided in the fiscal framework. It is under-recovery because it is a cost operation for the NNPC,” Ahmed had said.
The differential between the pump price of petrol and landing cost has ranged between N165 and N178 per litre in the months of November and December 2019, based on the data from PPPRA.
Operators stated that the fluctuation in the EOMP of petrol was due to the instability in the international price of crude oil.
The international price of petroleum has remained around $60/barrel in recent time due to effort by the oil cartel, the Organisation of Petroleum Exporting Countries (OPEC) and its allies to stablise the market.