Fuel Subsidy Now Over N400 Billion Monthly – NNPCL

Nigerian National Petroleum Company Ltd. (NNPCL) has announced that the monthly amount paid on Premium Motor Spirit (PMS), also known as petrol, as subsidy has surpassed N400 billion.

NNPCL's Group Chief Executive Officer, Malam Mele Kyari, made this announcement on Friday in Abuja during the ongoing Final Cutover to NNPC Ltd., from being a corporation.

According to Kyari, every litre of gasoline consumed nationwide costs NNPCL around N202 in subsidies.

In order to keep the nation moist, he said, the NNPCL daily poured around 65 million litres of PMS onto the market.

By continuing to provide PMS for Nigeria, the oil company will continue to fulfil its commitments, according to Kyari, who also noted that the over N400 billion monthly subsidy had put a significant pressure on NNPCL's cash flow.

He says that NNPCL has been Nigeria's sole importer of gasoline for many years while also absorbing the significant expense of fuel subsidies.

He stated that other private oil marketers stopped bringing gasoline into Nigeria because it was impossible to get the US dollars needed for the imports of PMS.

“Today, by law and the provisions of the Appropriation Act, there is subsidy on the supply of petroleum products, particularly PMS into our country. In current data terms, three days ago the landing cost was around N315/litre.

“Our customers are here, we are transferring to each of them at N113 per litre.

“That means there is a difference of close to N202 for every litre of PMS we import into this country. In computation, N202 multiplied by 66.5 million litres, multiplied by 30 will give you over N400 billion of subsidy every month,” he said.

Kyari added that despite the fact that the subsidy had been paid for in the Appropriations Act, NNPCL had continued to support the programme without receiving any reimbursements from the Federal Ministry of Finance, Budget, and National Planning.

“There is a budget provision for it. Our country has decided to do this. So, we are happy to deliver this, but it is also a drain on our cash flow, and I must emphasis this.

“For as we continue to support this, you will agree with me that it will be extremely challenging for us to continue to fund this from the cash flow of the company when you do not get refunds from the Ministry of Finance,” he said.

He expressed confidence that it would keep assisting the nation and supplying energy security.