Under normal circumstances, especially if the nation is not approaching a general election, indications are rife that the economy would have been in a serious fuel since the gradual rise in crude oil prices due to jumping landing costs of wet vessels at the ports and jetties.
However, analysts argue that the federal government decided to bear the brunt of cost differentials under its not-well-clear policy of ‘under-recovery’ by the Nigerian National Petroleum Corporation (NNPC) as landing cost rises to N171.
However, weekend, NNPC raised alarm, lamenting that the cost has exceeded N171 per liter while the pump price remained regulated at the maximum of N145 per liter.
The last known landing cost of the product was N171 per liter which is an indication of N26 per liter under-recovery cost.
The prices of crude oil had recently risen to about $80 per barrel, which has a direct effect on the landing cost of petroleum products. But in December last year when the price was $64.37 per barrel, the NNPC Group Managing Director, Dr. Maikanti Baru said the landing cost, which include product cost, insurance and freight was $620 per metric ton.
Whereas industry pundits who could not place government’s ‘Under-Recovery’ policy amongst known industry policies still saw the strange money bleeding platform as another face of fuel subsidy, NNPC’s Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, who revealed that Nigeria has cross the mark of 50m litres consumption daily, rejected the description of the payment of under-recovery as subsidy, but failed to give it any understandable name that can match any known economic plan.
