Petrol subsidy hits N2.43 billion daily

- Nigeria is currently paying N2.34 billion daily on petrol subsidy, report has said

- Also, PPMC has taken over the task of determining the daily consumption and subsidy on petroleum products in Nigeria

- PPMC's new role followed statistics which showed that the federal government pays N2.434 billion daily

A subsidiary of the Nigerian National Petroleum Corporation (NNPC), Petroleum Products Marketing Company (PPMC) has taken over the task of determining the daily consumption and subsidy on petroleum products in Nigeria.

Guardian reports that new role for PPMC followed statistics which showed that the federal government pays N2.434 billion daily to subsidise petrol as Petroleum Products Pricing Regulatory Agency (PPPRA) previously saddled with the responsibility had been unable to discharge the responsibility in the last two years.

Also, the group general manager, group public affairs division (GPAD) of the NNPC, Ndu Nghamadu, confirming PPMC's new responsibility failed to provide information on the current daily consumption.

Although it is not known what parameters PPMC uses to make projections upon which NNPC base its importation regime, however, as at yesterday, a gallon of petrol costs $2.54 Cent in the United States of America.

The naira equivalent of $2.54 Cent at official rate of N305 to the dollar is N774.7kobo. Therefore, the landing cost of a litre of petrol should be N193.68 kobo (excluding freight and other port charges).

At 50 million litres daily consumption, Nigeria currently pays N2.434 billion per day subsidising petrol.

Meanwhile, Legit.ng previously reported that the managing director of NNPC, Maikanti Baru, has said that the under-recovery recorded on petrol has dropped to N20 per litre from over N80.

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Baru made this known in Abuja on Monday, December 24, during a tour of filling stations with the Department of Petroleum Resources (DPR) and Nigeria Security and Civil Defense Corps (NSCDC) officials to ascertain the effective distribution of products to customers.

Legit.ng gathers that Under-recovery is the term used by NNPC to describe the financial amount of subsidy the federal government absorbs for keeping the pump price of petrol at N145 per litre. DPR estimates that 45 million litres of petrol is consumed daily.

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