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Govt to pay an estimated N102.96bn on fuel subsidy in March

It has been estimated that the Federal Government would pay a total of N102.96 billion as petrol subsidy in March 2021. This was revealed by the Group Managing Director, Rainoil Limited, Gabriel Ogbechie during his presentation at a webinar session organised by the Association of Energy Correspondents of Nigeria, NAEC held on Thursday.

Explaining how he arrived at the sum, he said in March 2021, crude price averaged $67 per barrel thereby increasing landing cost of petrol to N189.61 per litre. As a result, fuel subsidy in March 2021 is estimated to cost nothing less than N102.96billion.

Nigeria consumes about 57.44 million litres of petrol daily. The Central Bank of Nigeria, CBN has currently devalued the official exchange rate to ₦401/$1 from ₦380/$1. While pump price remained at N165/ltr, reports emerged that FG currently pay over N50 subsidy on every litre of petrol consumed in Nigeria.

The Petroleum Product Pricing Regulatory Agency, PPPRA had in March last year, “discontinued” subsidy following crash in the global crude oil prices. The price of Petroleum Motor Spirit, PMS also known as petrol pump was then moved from N145 per litre to N125 as landing cost of the product crashed to N99.44 per litre.

However, as crude price recovered and PMS landing cost increased, PMS pump price was moved to N143.8ltr in July 2020, N151.56/ltr in September 2020, N162/ltr in October, and N165/ltr in November 2020.

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Source: SweetCrudeReports

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