The Nigerian National Petroleum Corporation has incurred N756.99billion petrol subsidy costs from January to July in 2021.
This is according to the latest data obtained from the corporation.
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 global oil prices.
Recall that 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 sharp drop in crude oil prices.
Also, on August 9, the landing cost of petrol imported into the country increased to a new high of N249.42 per litre on July 30 from N240.17 per litre as of June 25.
NNPC, being the sole importer of petrol into the country for years, has been bearing the subsidy cost since it resurfaced.
Data from the corporation showed that it incurred N25.37bn subsidy in January, N60.40bn in February, N111.97bn in March, and N126.30bn in April and N114.34bn in May.
The subsidy cost rose from N143.29bn in June to N175.32bn in July, according to the NNPC.
“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", NNPC said.