PMS: Nigeria spends N6.5trn annually to subsidise 60 million litres daily supply ― NNPC

Barely 72 hours after the Nigeria Customs Service (NCS) questioned the Premium Motor Spirit (PMS) daily consumptions figures, the Nigerian National Petroleum Company (NNPC) Limited on Sunday, said Nigeria spends an annual estimate of N6.5 trillion on the assumption of 60 million litres daily PMS supply.

This was even as it maintained its stance on 68 million daily fuel supply.

The Company’s Spokesperson, Mallam Garba Deen Muhammad, in a statement issued in Abuja, said the average international market determined landing cost of the product in Q2 2022-“US$1,283/MT while the approved marketing and distribution cost of N46/litre.”

It stated that the combination of these cost elements translates to the retail pump price of N462/litre, an average subsidy of N297/litre.

While offering to submit itself for forensic audit of fuel supply and subsidy management, NNPC disclosed that between January and August 2022, the total volume of petrol imported into the country was 16.46 billion litres, which translates to an average supply of 68 million litres per day.

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“Similarly, import in the year 2021 was 22.35 billion litres, which translated to an average supply of 61 million litres per day,” the statement partly read.

According to figures quoted by the NNPC, the average daily evacuation (depot truck out) from January to August 2022, “stood at 67million litres per day as reported by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NWDPRA).

“While daily evacuation (depot loadouts) records of the NMDPRA do carry daily oscillation ranging from as low as four million litres to as high as 100 million litres per day.”

The company said the rising crude oil prices and PMS supply costs above PPPRA (now NMDPRA) cap had caused oil marketing companies’ withdrawal from PMS import since the fourth quarter of 2017.

“In the light of these challenges, NNPC has remained the supplier of last resort and continues to transparently report the monthly PMS cost under-recoveries to the relevant authorities,” it stated.

In view of this, it promised to ensure compliance with existing governance framework that requires the participation of relevant government agencies in all PMS discharge operations, “including Nigerian Ports Authority, Nigerian Midstream and Downstream Petroleum Regulatory Authority, Nigerian Navy, Nigeria Customs Service, NIMASA and all others.”

It, however, acknowledged the possibilities of criminal activities in the PMS supply and distribution value chain, pledging: “As a responsible business entity, NNPC will continue to engage and work with relevant agencies of the government to curtail smuggling of PMS and contain any other criminal activities.”

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PMS: Nigeria spends N6.5trn annually to subsidise 60 million litres daily supply ― NNPC

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PMS: Nigeria spends N6.5trn annually to subsidise 60 million litres daily supply ― NNPC