Politics
Unveiling The Strategy: FG’s Approach To Financing Petrol Subsidy Via Crude Oil Sales Revenue
Unveiling The Strategy: FG’s Approach To Financing Petrol Subsidy Via Crude Oil Sales Revenue....KINDLY READ THE FULL STORY HERE▶
Indications suggest that the Nigerian National Petroleum Company Limited (NNPC Ltd), on behalf of the Federal Government, is currently expending N17.72 billion daily to subsidize petrol, reportedly financed through crude oil sales proceeds.
The funding strategy, although veiled in secrecy, is believed to involve utilizing revenues from crude sales and direct cost recovery by NNPC. According to sources, this subsidy cost of N17.7 billion per day represents the variance between the landing cost of imported petroleum products and the effective wholesale price to petroleum marketers.
Given Nigeria’s reliance on imported petrol, with a daily consumption rate of approximately 44.3 million litres, the current average depot price and exchange rate imply potential monthly losses or revenue shortfalls of about N531 billion for the FG via NNPC.
These figures are now reflected in the monthly Federation Account Allocation Committee (FAAC) reports, with NNPC deducting the subsidy shortfall from its remittances to the Federation Account. Despite these deductions, the distributable balance remains notably higher than pre-May 30, 2023, figures due to increased product prices.
President Bola Ahmed Tinubu’s declaration on May 29, 2023, regarding the end of petrol subsidies led to immediate price hikes. Subsequently, pump prices rose to over N600 per litre, prompting concerns over the sustainability of NNPC’s pricing.
However, transparency issues have arisen, with the Finance Ministry withholding official data on petrol import prices, and NNPC refraining from publicizing its petroleum import information. Petroleum marketers argue that the current landing price exceeds N1,000 per litre, attributing the disparity to exchange rate fluctuations since subsidy removal.
Furthermore, industry analysts contradict the FG’s stance on subsidy abolition, indicating that not only has the subsidy regime returned but also it might surpass previous levels. They speculate that the government’s reluctance to pass the full imported petrol cost to consumers could stem from anticipated political and social repercussions, despite potential violations of the 2024 Appropriation Act.
The lack of transparency from NNPC undermines public trust, raising concerns about the motives behind subsidy-related actions. While uncertainty persists, stakeholders advocate for greater disclosure to clarify the situation and restore confidence in the oil and gas sector’s operations.
For more information join our WhatsApp group by clicking the link here: WhatsApp Group Invite
For inquiries only, contact us at omoikirodahoshiobugie@gmail.com, 08075806790 (WhatsApp only). For paid articles covering content related to shows, music promotion, asylum letters, concerts, politics, advertisement hit up the Whatsapp number 08075806790.
Source: Bushradiogist
Drama In National Assembly Debate As Farotimi Slams Akpabio’s Leadership Credentials
Tension Sparks As CAN Disowns Invitation Claim Involving Sultan Of Sokoto
Political Earthquake: Ibrahim Shekarau Dumps Peoples Democratic Party, Returns To All Progressives Congress
Ize Iyamu’s Continuous Stakeholder Consultations Reshape Political Dynamics in Edo South
Sh*ckwaves In Opposition Camp As Peter Obi Speaks On Atiku’s Exit Strategy
Abba Kabir Yusuf Declares: ‘I Am APC Leader In Kano, Ganduje Can’t Give Me Orders
Here’s What Happened” — Ex-Army Chief Buratai Speaks On Borno Airstrike Tragedy
Succession Buzz: Olusi Reveals Who May Replace Sanwo-Olu In 2027
Amaechi Sparks Debate: Atiku’s Electoral Strength May Be Confined To The North
