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Petrol Subsidy May Climb To N3tn In One Year – PPMC Cautions -

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News

Petrol Subsidy May Climb To N3tn In One Year – PPMC Cautions

 

Petrol Subsidy May Climb To N3tn In One Year – PPMC Cautions

Petrol subsidy will soon experience a further hike in Nigeria, THECONSCIENCEng reports.

The Petroleum Products Marketing Company (PPMC), a subsidiary of the Nigerian National Petroleum Corporation, has cautioned that the annual subsidy on Premium Motor Spirit known as Petrol will rise to N3trn if the current market realities continue.

The Managing Director of PPMC, Mr. Isiyaku Abdullahi, said this on Wednesday at a panel session during the 15th OTL Africa Downstream Week 2021 in Lagos.

He said: “At $80 crude oil, 60 million litres daily consumption and N411/$1 forex, PMS under-recovery per litre will be N138/litre. Daily PMS under-recovery will be N8.3bn. Annual PMS under-recovery will escalate to N3tn,”

It could be recalled that subsidy which the NNPC prefers to call ‘value shortfall’ or ‘under-recovery’, resurfaced in January this year as the government left the pump price of petrol unchanged at N162-N165 per litre despite the increase in oil prices.

The Federal Government had in March 2020 removed petrol subsidy after reducing the pump price of the product to N125 per litre from N145 following the crash in oil prices.

The NNPC, which has been the sole importer of petrol into the country in recent years, has been bearing the subsidy cost since it resurfaced.

Isiyaku said with the rehabilitation of the country’s refineries and the construction of condensate refineries as well as the Dangote refinery, the Nigerian fuels market would transform from import-dependent to a net exporter by 2024.

He said full deregulation of the downstream sector might push an accelerated switching to Compressed Natural Gas and Liquefied Petroleum Gas, subject to global energy prices trend in the near term.

He added by saying the Petroleum Industry Act presents a unique opportunity for investments across the value chain.

 

Jam theconscienceng

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