The latest figures obtained from the Nigerian National Petroleum Corporation (NNPC) has shown that Nigeria’s fuel subsidy payment increased by 1,174% within two months.
According to reports, NNPC spent a total of N206.59 billion on subsidy between January and February 2019, having spent a lesser amount (N16.21 billion) in November and December 2018.
The NNPC has classified the 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 N145 per litre, even though the real market price is above this regulated rate.
According to NNPC’s Monthly Financial and Operations Report for May 2019, released on Thursday, the difference between what the oil firm spent on subsidy in January/February 2019 and November/December 2018 is N190.37 billion.
NNPC has been the sole importer of petrol into the country since 2017. It removes the cost incurred in its importation before remitting it to the Federation Account.
In the latest report, the Corporation stated that it recorded under-recovery of N104.35 billion in January 2019, rising by 682% or N91 billion from N13.34 billion recorded in December 2018.
By February 2019, the amount paid as under-recovery dropped by 1.9% to N102.338 billion.
The report further shows that the amount declared as under-recovery by the Corporation in November 2018 was at N2.88 billion, meaning it dropped from N40.53 billion as recorded in October 2018.
NNPC to collaborate with Chevron: The NNPC has called for a collaboration with Chevron Nigeria Limited to establish a condensate splinter refinery in order to grow local refining of crude oil.
The Group Managing Director of NNPC, Mele Kyari, had appealed to the Management of Chevron led by Jeff Ewing, Chevron’s Managing Director during a business visit to the NNPC’s headquarters in Abuja.
According to Kyari, it is not the responsibility of NNPC alone to set up refineries to end the shame of fuel importation but also the responsibility of its venture partners.
He further urged Chevron Nigeria Limited to work closely with the Corporation to improve the cost structure of crude oil production in Nigeria in order to boost profit and revenue for the country.
“We hold Chevron Nigeria Limited in very high esteem for her efficiency and cost optimisation. We look more up to the company to increase production and reserve, reduce cost and increase local refining capacity.”