The subsidy on petrol at the weekend crashed to N11.38 per litre, amounting to daily payment of N286 million from N2.064 billion it was in June, New Telegraph is reporting.
It was gathered that the crash in the Expected Open Market Price (EOMP) released by the Petroleum Products Pricing Regulating Agency (PPPRA) at the weekend and the re-streaming of three refineries in Nigeria have reduced the government’s spending on subsidy by N1.778 billion per day between June and October.
The EOMP, the landing cost (N82.89) and all margins on the product (N15.49), which was last update on PPPRA’s website on October 16, dipped to N98.38 per litre.
With the new figure, subsidy to be paid on each of the 26 million litres of petrol imported by the Federal Government has dropped to N11.38, given the regulated price of the product at N87 per litre.
The re-streaming of the two refineries in Port Harcourt and one in Kaduna has, according to the data of the Nigerian National Petroleum Corporation (NNPC), reduced fuel importation by about 14 million litres.
Average total fuel consumption in Nigeria is 40 million litres daily, according to figures from the Pipelines and Products Marketing Company (PPMC) while the average importation on which subsidy is paid is about 26 million litres.
The refinery in Warri, which is shut due to tech-nical hitch, could have further reduced the importation figure by about five million litres, if it had been operational.
On a conversion rate of one metric tonne to 1, 341 litres of fuel, the PPPRA placed its pricing template on N196.98 to $1. The subsidy had, on August 18, crashed to N954.75 million daily.
The EOMP had earlier hit N138.61 per litre on June15, pushing daily subsidy on 40 million litres fuel consumption to N2.0644 billion then.
Nigeria, Africa’s biggest crude exporter, relies majorly on importation for most of its fuel needs due to the inefficiency of its four refineries in Port Harcourt, Warri and Kaduna.
The EOMP has now dropped to N286 million, reducing the subsidy cost (difference between EOMP and regulated price of N87 per litre) to N11.38 per litre.
In June, it was N51.61 per litre, up from N2.84 as of January 21, 2015. Meanwhile, the Federal Government has reiterated its promise to pay backlog of subsidy to marketers.
Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Ibe Kachikwu, at a meeting with Major Oil Marketers Association of Nigeria (MOMAN) and Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), said he would work with other Federal Government agencies to fast track the payment of the amount.
He said at a meeting with the oil marketers in Abuja that in the interim, he would arrange for a meeting with bankers to which the oil importers owe, to ease pressure on them and to extend the credit facilities to the oil marketers.
Executive Secretary of the major marketers, Mr. Femi Olawore, commended the GMD for his support and pledged the readiness of the marketers to work with the Federal Government in ensuring zero fuel scarcity across the nation during the forthcoming Yuletide and beyond.
Olawore called on Kachikwu to facilitate the institution of a special committee to verify and authenticate the current national petrol consumption figure of 40 million litres per day.