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FG spends N270bn on subsidy in Q2

Clara Nwachukwu & Victor Ahiuma-Young

THE Federal Government has spent about N270bn as subsidy on premium motor spirit, popularly called petrol as at the end of the second quarter of this year to service.

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The sum is the amount paid to oil traders, marketers and depot operators, as reimbursement for the difference in the landing cost of imported petrol and the international market price.

Speaking with journalists in Lagos on Friday, the Executive Secretary, Petroleum Products Pricing Regulatory Agency, PPPRA, Mr Abiodun Ibikunle, said operations in downstream petroleum supply and distribution is now more efficiently managed.

This, he said is because of the stability that has now been entrenched in the system, as most of the loopholes that gave rise to products scarcity have been blocked, if not completely eliminated, as there was more than adequate products supply to every part of the country.

He said, “I believe the issue of scarcity will not reappear in Nigeria again, because even the remotest part of the country now has fuel. Also, marketers that were prone to hoarding products can no longer do so, because of the flooding of fuel in every part of the country, to the extent that some retail outlets are even selling below the regulated price of N65/litre. This is evidence that some of the measures taken by the agency are in the right direction and with time consumers will enjoy the benefits the more.”

He added that a market survey conducted by the agency revealed that pump price of petrol is lower in Ogun, Osun and parts of Oyo states, where petrol is sold at N64/litre, while in parts of Lagos it is sold at N64.80/litre.

The PPPRA scribe said this is one of the reasons the federal government is putting its full weight behind the establishment of green refineries in different parts of the country.

Furthermore, he said that even the leakages the agency witnessed in the past where marketers made frivolous claims are also effectively controlled with multiple layers of supervision of import, which also include the Nigerian Ports Authority, NPA; Nigerian Customs Services; the Department of Petroleum Resources; and an International auditor appointed by the government.
He said that under the current structure, the quantity of product imported must be agreed by all parties and counter-checked by the PPPRA, before payment for claims are processed through the Debt Management Office, DMO and final payment by the Central Bank.

With regard to the impasse over the allocation of import permit, Ibikunle reiterated that participants are welcome to apply as long as they meet the set criteria for it.

He added that quantities are allocated such that as many as applicants as possible are accommodated, to avoid a situation where one party is unable to meet the delivery of the quantity allocated and result in scarcity, as was the case in the past.

Nonetheless, he said that in making the allocations, the Nigerian National Petroleum Corporation, NNPC, is given preference because it has the biggest operating structure and facility in the country.


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