The Nigerian National Petroleum Company Limited (NNPCL) says over N400 billion was being spent monthly as subsidy on Premium Motor Spirit (PMS), otherwise known as petrol.
The NNPCL Group Chief Executive Officer, Mele Kyari, who made this known in Abuja on Friday, lamented that the amount has been a severe strain on the company’s cash flow.
Kyari explained that about N202 was spent as subsidy on every litre of petrol consumed nationwide.
Kyari, who noted that about 65 million litres of petrol was pumped daily into the market by NNPCL to keep the country wet, assured that the company would continue to meet its obligations by providing petrol for the country.
He said: “Today, by law and the provisions of the Appropriation Act, there is subsidy on the supply of petroleum products, particularly PMS into our country. In current data terms, three days ago, the landing cost was around N315/litre.
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“Our customers are here; we are transferring to each of them at N113/litre. That means there’s a difference of close to N202 for every litre of PMS we import into this country.
“In computation, N202 multiplied by 66.5 million litres, multiplied by 30 will give you over N400bn of subsidy every month.”
Kyari further noted that the continuous funding of petrol subsidy by NNPCL has been ongoing without refunds from the Federal Ministry of Finance, Budget and National Planning, despite the subsidy being budgeted for in the Appropriation Act.
“There is a budget provision for it. Our country has decided to do this. So we are happy to deliver this, but it is also a drain on our cash-flow, and I must emphasis this.
“For as we continue to support this, you will agree with me that it will be extremely challenging for us to continue to fund this from the cash-flow of the company when you do not get refunds from the Ministry of Finance.
“We are working with them (finance ministry), but it is an extensive pain on the cash-flow of our account. However, we will continue to support this country and deliver energy security,” the NNPCL boss added.
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