The Federal Government’s subsidy on fuel has risen to N2.4 billion daily in May, from N774 million in March 2018.
This rise in subsidy payment is as a result of the high price of crude oil in the international market.
Unlike in March, this year, when the price of crude oil hovered at $66 per barrel, it hovered between $75 and $80 per barrel since last month, thus pushing up landing cost of the refined product in the domestic markets for finished product importers like Nigeria.
According to a report released yesterday by the Petroleum Products Pricing Regulatory Agency, PPPRA, without the government subsidy, the price of petrol could have been as high as N205 per litre in the domestic market.
PPPRA stated, “the price of the commodity appreciated by 8.47 per cent from N189 per litre recorded in April 25, 2018 to N205 per litre as at May 16, 2018.”
The PPPRA report disclosed that during the week under reference, between May 11 and May 16, 2018, oil prices continued to soar, stating that the average price for Brent Dated was $77.92 per barrel; Nigeria’s Bonny Light was $78.08 while West Texas Intermediate, WTI, was $60.27 per barrel.
Price of petrol is still fixed at a maximum of N145 per litre, meaning that the NNPC is currently paying N60 as under recovery for a litre of the commodity.