The Federal Government has incurred a
total sum of N56.784bn in petrol subsidy arrears since Muhammadu Buhari
took over as President of the country on May 29, this year.
According to data from the Petroleum
Products Pricing Regulatory Agency, obtained from the agency’s website
on Friday, the country is said to be incurring petrol subsidy arrears to
the tune of N47.32 per day on one litre of petrol.
Between May 29 and now, the current government has spent 30 days in office.
Based on a daily petrol consumption
figure of 40 million litres, a figure supplied by the Pipelines and
Products Marketing Company, the total subsidy cost on the product for
the 30 days the Buhari government has been in power amounts to N56.784bn
at N47.32 per litre.
The
current PPPRA figures put the total cost of Premium Motor Spirit
(petrol) at N134.32 per litre, of which N118.83 is the landing cost
while N15.49 is the sub-total of the margins.
According to the PPPRA, the cost of a
litre of petrol with freight is N106.85; traders’ margin, N1.47;
lightering expenses, N4.19; the Nigerian Ports Authority rate, N0.77;
financing, N1.75; jetty depot thru’put charge, N0.80; and storage cost,
N3.00.
For the distribution margins, retailers
are entitled to N4.60 per litre of petrol; transporters, N2.99; dealers,
N1.75; bridging fund, N5.85; marine transport average, N0.15; and
administrative charge, N0.15.
For the period under review, only the
Nigerian National Petroleum Corporation is said to be importing petrol
because members of the Major Oil Marketers Association of Nigeria have
refused to import owing to subsidy arrears owed them by the Federal
Government.
Oil marketers had on June 3 this year said they were still being owed over N291bn subsidy claims.
They also denied being saboteurs on account of the petrol scarcity, which recently hit Nigerians and the nation’s economy.
Then, the Executive Secretary, Depot and
Petroleum Products Marketers Association, Mr. Olufemi Adewole, was
quoted as saying, “It has become necessary to state the fact that depot
owners and other fuel importers under the ‘petroleum support fund
scheme’ are still being owed billions of naira in subsidy reimbursement,
interest on delayed payment and foreign exchange differentials.”
Adewole said the former Minister of
Finance and Coordinating Minister for the Economy, Dr. Ngozi
Okonjo-Iweala, had accused the association and a sister union of
sabotage in her letter to them, a copy of which she reportedly released
to the Senate for reference.
He, however, said the letter did not
state the timeline for the re-verification exercise which the minister
instituted on the amount she disputed.
It also did not state the expected date
of payment, which the ‘PSF’ participants had been clamouring for in all
the meetings held with Okonjo-Iweala since February 2015.
“It would be injustice against
participants in the ‘PSF scheme’ who actually render a social service to
the nation by importing petrol at international rate and sell below
cost price at the behest of the Federal Government to be labelled as
saboteurs. This is just because they asked to be refunded the difference
between the landing cost of the imported petrol and the local selling
price in line with the agreed conditions of participation,” Adewole
said.
Meanwhile, the transition committee set
up by President Muhammadu Buhari shortly after he was declared the
winner of the March 28 presidential election had advised him to end the
fuel subsidy programme and privatise the nation’s four refineries.
Sources in the All Progressives Congress, were said to have revealed the recommendation to Reuters some days ago.
Nigeria, which is Africa’s top oil
producer and biggest economy, heavily subsidises petrol and kerosene
consumption and relies on imports for the bulk of its domestic demand
due to an under-performing refining system.
The subsidy regime, which was said to
have handed out more than N1tn in fraudulent claims to oil marketers in
2012, is proving to be increasingly costly.
Buhari is said to be considering the
recommendations made in the strategy report produced by the 19-member
committee led by Ahmed Joda.
