Price of crude, landing cost differentials push ‘under-recovery’ to N3bn daily
Indication has emerged that the federal government may be currently weeping in silence over the rising cost of what Nigerians know as subsidy payments for fuel imports even though it chooses to call it under-recovery.
The development is coming from the crude price differentials which hovered at $66 per barrel in March and shut up to between $75 and $80 per barrel since last month as the scenario is pushing up landing cost of the refined product in the domestic markets.
Otherwise, the government may be spending as high as N3billion daily in May, from N774 million in March, 2018.
But due to the understanding that touching fuel price in an election year will spell doom for any ruling party, government is now in a serious financial situation it can only manage till after general election next year.
It would be recalled that 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 at a time the country is consuming about 50 million litres of fuel on a daily basis.
Facts from a report sourced at the Petroleum Products Pricing Regulatory Agency (PPPRA), show that if the government had not been paying huge subsidy, real in-country price of fuel would have jumped to N205 per litre.
PPPRA report noted that 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, adding that during the week under reference, between May 11 and May 16, 2018, oil prices continued to soar at an average price for Brent Dated at $77.92 per barrel; Nigeria’s Bonny Light was $78.08 while West Texas Intermediate, WTI, was $60.27 per barrel.
