The Nigerian National Petroleum Corporation (NNPC) reported that it incurred N756.99 billion on fuel subsidy from January to July this year.
These figures were contained in the state-owned petroleum company’s operations report for the seven- month period.
According to the corporation’s data on fuel importation and subsidy provisions in the financial records, the subsidy provisions showed that in January the corporation incurred N25.37 billion compared to the N60.40 billion incurred in February.
For March this year, the subsidy on imported petrol rose to N111.97 billion; N126.30 billion in April before decreasing to N114.34 billion in May. Again, in June the subsidy cost climbed to N143.29 billion and further surged to N175.32 billion in July.
The NNPC clarified on the subsidy cost: “Out of the value shortfall of N143,286,281,752.62, the sum of N103,286,281,752.62 was applied on the gross domestic receipts before arriving at the net receipt of N67.28bn in order to make funds available for JV cost recovery to sustain the existing production level. The balance of N40bn will be deducted in subsequent months.
“The July 2021 value shortfall of N175,317,701,294.80 & outstanding balance of N40bn will be deductible from the August 2021 proceeds due for sharing at the September 2021 FAAC meeting”, the corporation stated.
Indications showed that the rising cost of fuel subsidy in the months was largely caused by the depreciating exchange value of the Naira as well as other fiscal factors, including Federal Government’s retention of the fuel pump price at between N162-N165 per litre despite the rising global oil prices.
It would be recalled that government had in March 2020 stopped the petrol subsidy regime after it reduced fuel pump price from N145 per litre to N125 following the sharp drop in crude oil prices at the global oil market.
