NNPC renew subsidy as petrol landing cost hits N145

There are allegations that subsidy has returned to the Nigerian oil sector months after the Federal Government suspended the prcess.

In a report by Punch, the Federal Government has resorted to subsidy regime following an increase in the landing cost of Premium Motor Spirit, also known as petrol.

The Muhammadu Buhari-led regime stopped the fuel subsidy, which was costing the government millions of naira.

NNPC, Nigeian NNPC, IBe, Baru, Oil & Gas

The report claimed that the Nigerian National Petroleum Corporation, now responsible for about 90 percent of the importation of the product, is currently bearing the latest subsidy cost on behalf of the government.

The Federal Government had on May 11, 2016 announced a new petrol price band of N135 to N145 per litre, a move that signalled the end of fuel subsidy.

The Petroleum Products Pricing Regulatory Agency explained then that the rise in crude oil price and prevailing high cost of importation had brought back subsidy.

The PPPRA, in its pricing template released following the introduction of a new price band, put the landing cost and total cost of petrol at N122.03 and N140.40 per litre, respectively.

The cost of the product and the freight rate, which are the elements mostly affected by crude oil price and exchange rate, were put at $534 per metric tonne of petrol or N111.30 per litre, using an exchange rate of N280/dollar.

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