FG to spend N102billion on subsidy in March, to consult widely on subsidy removal

The Nigerian National Petroleum Commission, NNPC is expected to spend N102.96bn on petrol subsidy this month, in view of the recent pricing template for the commodity.

The NNPC has said that, the Federal Government would be consulting a lot of stakeholders before any decisions on subsidy on Premium Motor Spirit, popularly called petrol, is made.

Records have it that Nigeria consumes about 57.44 million litres of petrol daily, while the actual ex-depot cost for the product was N206.42/litre, while the NNPC sells the commodity at an ex-depot price of N148.6/litre.

NNPC has however insisted that, it would maintain this rate throughout this month, hence taking responsibility of a subsidy of N57.82/litre on the about 57.44 million litres consumed daily.

Kennie Obateru, the Group General Manager, Group Public Affairs Division said that the sustenance of subsidy would be dependent on the dialogue between the government and labour unions.

He said “The government does not just look at economics to determine certain things. So the fact is that the government is not supposed to inflict pains on the citizenry”.

“And this is why the government wants to do a very wide consultation with all interested parties so that an agreement could be reached and we expect that the agreement will be reached before too long.”

Obateru further said that, “NNPC would not hike petrol price in March so as not to fracture the ongoing discussions between government and the organised labour on the fuel price matter”.

You would recall that Petroleum Products Pricing Regulatory Agency (PPPRA), the regulator of the downstream oil sector had recently published the expected new lower and upper prices for petrol at retail outlets in March 2021, putting the rates at between N209.61/litre and N212.61/litre.

It also made public the ex-depot price of petrol for the month to stand at N206.42/litre, while also stating that the expected landing cost is N189.61/litre.

The PPPRA however stated that the published guiding price did not translate into a hike in pump price despite reflecting market realities.