Buhari’s Govt Incurs N57b Petrol Subsidy Debt

The Federal Government has
incurred a total sum of N56.784bn in
petrol subsidy arrears since
Muhammadu Buhari took over as
President of the country on May 29,
this year.
According to data from the
Petroleum Products Pricing
Regulatory Agency, obtained from
the agency’s website on Friday, the
country is said to be incurring petrol
subsidy arrears to the tune of N47.32
per day on one litre of petrol.
Between May 29 and now, the
current government has spent 30
days in office.
Based on a daily petrol consumption
figure of 40 million litres, a figure
supplied by the Pipelines and
Products Marketing Company, the
total subsidy cost on the product for
the 30 days the Buhari government
has been in power amounts to
N56.784bn at N47.32 per litre.
The current PPPRA figures put the
total cost of Premium Motor Spirit
(petrol) at N134.32 per litre, of
which N118.83 is the landing cost
while N15.49 is the sub-total of the
margins.
According to the PPPRA, the cost of
a litre of petrol with freight is
N106.85; traders’ margin, N1.47;
lightering expenses, N4.19; the
Nigerian Ports Authority rate, N0.77;
financing, N1.75; jetty depot
thru’put charge, N0.80; and storage
cost, N3.00.
For the distribution margins,
retailers are entitled to N4.60 per
litre of petrol; transporters, N2.99;
dealers, N1.75; bridging fund, N5.85;
marine transport average, N0.15;
and administrative charge, N0.15.
For the period under review, only
the Nigerian National Petroleum
Corporation is said to be importing
petrol because members of the
Major Oil Marketers Association of
Nigeria have refused to import
owing to subsidy arrears owed them
by the Federal Government.
Oil marketers had on June 3 this
year said they were still being owed
over N291bn subsidy claims.
They also denied being saboteurs on
account of the petrol scarcity, which
recently hit Nigerians and the
nation’s economy.
Then, the Executive Secretary, Depot
and Petroleum Products Marketers
Association, Mr. Olufemi Adewole,
was quoted as saying, “It has
become necessary to state the fact
that depot owners and other fuel
importers under the ‘petroleum
support fund scheme’ are still being
owed billions of naira in subsidy
reimbursement, interest on delayed
payment and foreign exchange
differentials.”
Adewole said the former Minister of
Finance and Coordinating Minister
for the Economy, Dr. Ngozi Okonjo-
Iweala, had accused the association
and a sister union of sabotage in her
letter to them, a copy of which she
reportedly released to the Senate for
reference.
He, however, said the letter did not
state the timeline for the re-
verification exercise which the
minister instituted on the amount
she disputed.
It also did not state the expected
date of payment, which the ‘PSF’
participants had been clamouring
for in all the meetings held with
Okonjo-Iweala since February 2015.
“It would be injustice against
participants in the ‘PSF scheme’ who
actually render a social service to
the nation by importing petrol at
international rate and sell below
cost price at the behest of the
Federal Government to be labelled
as saboteurs.
This is just because they asked to be
refunded the difference between the
landing cost of the imported petrol
and the local selling price in line
with the agreed conditions of
participation,” Adewole said.
Meanwhile, the transition committee
set up by President Muhammadu
Buhari shortly after he was declared
the winner of the March 28
presidential election had advised
him to end the fuel subsidy
programme and privatise the
nation’s four refineries.
Sources in the All Progressives
Congress, were said to have
revealed the recommendation to
Reuters some days ago.
Nigeria, which is Africa’s top oil
producer and biggest economy,
heavily subsidises petrol and
kerosene consumption and relies on
imports for the bulk of its domestic
demand due to an under-performing
refining system.
The subsidy regime, which was said
to have handed out more than N1tn
in fraudulent claims to oil marketers
in 2012, is proving to be increasingly
costly.
Buhari is said to be considering the
recommendations made in the
strategy report produced by the 19-
member committee led by Ahmed
Joda.

SOURCE: PUNCH