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Nigeria’s Petrol Subsidy Hits N707bn Monthly, Say Oil Marketers
With petrol landing cost at N1,117 per litre, Nigeria’s monthly subsidy on petrol has increased to N707bn.
EKO HOT BLOG reports that with the landing cost of Premium Motor Spirit (PMS) at N1,117 per litre, the monthly subsidy for petrol has surged to approximately N707bn, according to oil marketers on Monday.
As the Dangote Petroleum Refinery prepares to begin petrol production in August, it may export the product due to crude oil supply issues and regulatory challenges.
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The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, held discussions with Dangote refinery officials, NNPC, and petroleum regulators regarding these concerns.
Meanwhile, the House of Representatives has set up an investigative committee to address the lack of crude oil for domestic refineries and the alleged deliberate hike in petrol costs for profiteering.
The Major Energies Marketers Association of Nigeria (MEMAN) reported that the landing cost of petrol was N1,117/litre, while the Independent Petroleum Marketers Association of Nigeria (IPMAN) maintained that the government was still subsidizing PMS, which might soon lead to higher pump prices.
MEMAN also revealed that the landing costs of diesel and aviation fuel were N1,157/litre and N1,127/litre, respectively. Unlike diesel and aviation fuel, the pump price of petrol is significantly lower than its landing cost.
Despite NNPC and major marketers selling petrol between N617/litre and N670/litre, the ex-depot price is N585/litre. Independent marketers often purchase at higher rates from private depots, resulting in pump prices above N700/litre.
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As NNPC remains Nigeria’s sole petrol importer, the difference between the landing cost and the ex-depot price results in a subsidy of about N532 per litre. With daily consumption figures varying, the most recent estimate of 44.3 million litres per day suggests a daily subsidy expenditure of N23.57bn, leading to a monthly total of around N707bn.
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