The Federal Government said it spent N1.5 trillion to subsidize Premium Motor Spirit, PMS, also known as petrol in 2019.
Ita Enang, the senior special assistant to the President on Niger Delta Affairs, disclosed this in a communiqué made available to journalists on Thursday, April 9, 2020.
The communiqué was issued after a consultative meeting between a Federal Government team led by the Office of the Senior Special Assistant to the President on Niger Delta Affairs and the Association of Artisanal Local Refineries Operators in Nigeria.
Enang disclosed that the amount was incurred as a subsidy because the commodity was imported at points where the landing cost was higher than the regulated price of the commodity in Nigeria.
He, however, warned that with the current crash in the prices of crude oil in the international market, the government would be faced with dwindling revenue from crude oil sales and other barter arrangements, which would make it impossible for the country to sustain the subsidy regime.
He said: “Whereas the price of crude oil has drastically dropped to the twenties dollar per barrel band and there will be great cost differentials if we still ship very cheap crude abroad, pay the export shipping cost and incidentals, get them refined abroad and ship back to Nigeria paying another shipping and landing, agencies and incidental cost, including subsidies; “Whereas with the crashed cheap price of crude oil, Nigeria will not have enough revenue from crude sales or any batter arrangement to sustain the subsidy regime currently operating.
“Whereas the import of refined petroleum products, indeed PMS, in particular, has more cost element of marine transportation, Nigeria Port Authority, NPA, charge for export/import handling, Nigeria Maritime Administration and Safety Agency, NIMASA, charges, and indeed other charges relating to in and maritime transportation.”
