The Nigerian National Petroleum Corporation (NNPC) spent over N535.9 billion on subsidy and Federation Account Allocation Committee in the first quarter of 2020.
This was disclosed by the corporation in its Monthly Financial and Operations March 2020 report.
The report revealed that while the petrol subsidy gulped N101.65bn in the first three months of the year, the sum of N434.25 billion was paid to FAAC within the same period.
The national oil firm described the subsidy spending as under-recovery. This means that Nigeria is incurring an additional cost in subsidizing the price of petrol to make sure it falls within the regulated price of N143.80 per litre, even though the real market price is above this regulated rate.
It had consistently argued that only the National Assembly was empowered to approve petrol subsidy, despite the fact that NNPC’s monthly under-recoveries were due to subsidy on petrol.
According to the report, while the corporation spent N43.31bn as subsidy on petrol in January 2020, in February, it incurred N20.68bn as under-recovery, and N37.66 billion in March as subsidy.
However, subsidy was halted in March 2020 by the Petroleum Products Pricing Regulatory Agency after the crash in global crude oil prices.
The development, according to the PPPRA, led to the end of petrol subsidy, as the agency stated that petrol price would be adjusted in accordance to global oil prices.
The PPPRA has adjusted petrol price about three times since after the first adjustment in March this year.
The NNPC report further stated that the corporation paid N434.25bn to the Federation Account Allocation Committee during the quarter under review.
It stated that in January, a total of N138.57bn was remitted to FAAC, while the committee received N148.53bn from the corporation in February 2020.
The NNPC said it paid N147.15bn to FAAC in March this year.