The Petroleum Products Marketing Company, a subsidiary of the Nigerian National Petroleum Corporation, has said the annual subsidy on Premium Motor Spirit (petrol) will rise to N3tn if the current market realities persist.
The Managing Director, PPMC, Mr Isiyaku Abdullahi, said this on Wednesday at a panel session during the 15th OTL Africa Downstream Week 2021 in Lagos.
“At $80 crude oil, 60 million litres daily consumption and N411/$1 forex, PMS under-recovery per litre will be N138/litre. Daily PMS under-recovery will be N8.3bn. Annual PMS under-recovery will escalate to N3tn,” he said.
The PUNCH had exclusively reported on October 12 that the sharp rise in global oil prices to record highs had pushed the subsidy cost being incurred by the Federal Government to N8.28bn daily.
The subsidy, which the NNPC prefers to call ‘value shortfall’ or ‘under-recovery’, resurfaced in January this year as the government left the pump price of petrol unchanged at N162-N165 per litre despite the increase in oil prices.
The Federal Government had in March 2020 removed petrol subsidy after reducing the pump price of the product to N125 per litre from N145 following the crash in oil prices.
The NNPC, which has been the sole importer of petrol into the country in recent years, has been bearing the subsidy cost since it resurfaced.