- There are indications that the Federal Government is now spending about N4.5 billion to subsidize premium motor spirit (PMS), otherwise called petrol and House Hold Kerosene (HHK) otherwise called kerosene.
- According to the data posted on the website of Petroleum Products Pricing Regulatory Authority (PPPRA) on Friday, subsidy payment on petroleum had risen from N45.28 per litre to N54.21 per litre while subsidy on kerosene is now N70.96 per litre.
- The Nigerian National Petroleum Corporation (NNPC) had put average daily consumption of petrol at 40 million litres while that of kerosene is said to be about 33 million litres per day.
- Multiplying the amount of fuel consumed across the country on a daily basis with the current amount spent on subsidizing the products, it means that the government spends about N2.17 billion on petrol subsidy and N2.34 billion on kerosene subsidy daily.
- The PPPRA stated that the pricing templates were based on Average Platts’ Prices for July 9, 2015. With these calculations, the actual landing cost of petrol was N125.72 per litre.
- Reacting to huge sum being spent on subsidy, the Chief Executive Officer, Financial Derivatives Company, Mr Bismark Rewane, said that the continued payment of subsidy was making it difficult for the government to have enough funds to run the country’s economy.
- He said the country’s debt was rising, adding that the subsidy on petrol was not helping matters.
Rewane said: “The debt servicing burden is quite high. We are spending almost 25 per cent of our revenue to service debt, and again we have another large percentage that is spent on subsidy. When you consider all these, you will find out that there will be nothing left to run the economy.”