The Nigerian National Petroleum Corporation (NNPC) at the moment spends N53 under-recovery in terms of petroleum products pricing for every litre of Premium Motor Spirit (PMS) consumed by Nigerians.
TheNewsGuru (TNG) reports Director of Budget in the Ministry of Budget and National Planning, Ben Akabueze made this known while fielding questions from participants at the Strategic Dialogue on the Morocco-Nigeria Relations in Abuja on Wednesday.
According to estimates available at the petroleum regulatory agency of Nigeria, the Department of Petroleum Resources, Nigerians consume 45 million litres of PMS, otherwise known as petrol, on a daily basis. This translates to mean that the NNPC records about N2.38 billion as under-recovery daily, and over N800 billion on a year basis.
According to the National Bureau of Statistics’s (NBS) PMS price watch for September 2018, average price paid by consumers for premium motor spirit (petrol) across states in Nigeria is N147.3, meaning Nigerians were supposed to be paying over N200 for fuel per litre if it were not for the ‘subsidy’, now branded as under-recovery.
According to Akabueze, at the Strategic Dialogue on the Morocco-Nigeria Relations in Abuja, the huge amount being paid by the NNPC has grave financial implications for the country by dragging down the country’s revenue.
“At the moment, in terms of pricing of petroleum products, for every litre of petrol, there is a N53 under-recovery. Well, that is the term that the NNPC, which has this responsibility, calls it and so who am I?
“On oil price, it is a double-edged sword unfortunately. This ought to be a season where we should be clicking glasses with regards to the oil price. But right now, practically every drop of refined petroleum product that we consume in the country is imported.
“And the one single factor that determines the price of refined product is the price of crude. In essence, while we export the crude at about $80 (per barrel), we effectively import back the same crude at about $100 importation price for refined products.
“That explains why despite the strong oil prices, we are not seeing a corresponding growth in government revenue,” he stated.
Akabueze further stated that building new refineries may not be the answer but getting the old ones to work and meet demands.
He said that is why the government is working to opening up private individuals/investments for refinery ownership and operations.
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