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Due to the instabilty in the sale and distribution of petroleum products, the Nigerian House of Representatives’ Ad Hoc Committee which had been installed to investigate the Petroleum Products Subsidy Regime from 2013 to 2022 had on Thursday, queried the Nigerian Minister of Finance, Budget and National Planning, Zainab Ahmed, over some of the payments of subsidy on Premium Motor Spirit (petrol) by the Federal Government of Nigeria.
Zainab Ahmed on her part had also disclosed that the Federal Government of Nigeria spends over ₦283 per litre of PMS or ₦18.397bn per day as subsidy.
She said, “For 2023, the projection is that the average daily truck out will be ₦64.96 million litres per day; that is about 65 million per day, using an average rate at open market rate of ₦448.20k and then a regulator pump price of ₦165 per litre. This gives us an average under-recovery, that is the difference between ₦165 and ₦448 of ₦283.2k.
“So, just multiply the amount of litre per day, the open market exchange rate of naira to the dollar and then, the gap between the pump price and open market price, the total amount of subsidy per day is ₦18.397bn.
“So, if you are projecting for the full year, from January to December, it will be ₦6.715tn. If you are projecting for half a year, it will be 50 per cent of that, 3.375tn. I said earlier in the recommendations that we sent to parliament for consideration on MTEF is half-year, that will be ₦3.357tn.”
The minister stated, “Fuel subsidy is the difference between the pump price which is now fixed at N165 (per litre) and the landing cost which we are projecting at an average of ₦448 per litre in 2023. Even now, the cost is around that.
“So, the PMS subsidy we are carrying today in the nation is around ₦283 per litre; that is what we are carrying. So, it is the difference between the pump price and the landing cost of petroleum products in the country.”