NNPC ready for forensic audit On Fuel Subsidy, insists daily supply is 68 million litres

On reacted allegations of Nigeria spending way too much on litres of subsidized fuel, stating that it will offer itself for a forensic audit of fuel supply and subsidy management, insisting that daily fuel supply is 68 million litres.

This was disclosed in a statement on Sunday by Malam Garba Muhammad, Group General Manager, Group Public Affairs Division, NNPC.

The House of Reps has also started a probe into subsidy payments approved by the FG, coming as Nigeria expects to spend over N6 trillion on fuel subsidy next year.

What the NNPC is saying

Garba Muhammad noted that between January and August 2022, the total volume of Premium Motor Spirit (PMS) imported into the country was 16.46 billion litres, which he says is an average supply of 68 million litres per day.

He added that import in the year 2021 was 22.35 billion litres, which is an average supply of 61 million litres per day.

“The average daily evacuation (depot truck out) from January to August 2022 stands at 67 million litres per day as reported by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

“While daily evacuation (depot load outs) records of the NMDPRA carries daily oscillation ranging from as low as four million litres to as high as 100 million litres per day,” he said.

NNPC added that rising crude oil prices and PMS supply costs above PPPRA (now NMDPRA) cap had caused oil marketing companies’ withdrawal from PMS import since the fourth quarter of 2017, which NNPC had remained the supplier of last resort and continued to transparently report the monthly PMS cost under-recoveries to the relevant authorities.

He noted that the average cost on the international market determined landing cost, citing that in Q2 2022, it rose to 1,283 dollars per metric tonnes and N46 per litre approved marketing and distribution cost.

“The combination of these cost elements translates to retail pump price of N462/litre, an average subsidy of N297/litre, and an annual estimate of N6.5 trillion on the assumption of 60 million litres daily PMS supply.

NNPC says it will continue to work with Nigerian Ports Authority, NMDPRA, Nigerian Navy, Nigeria Customs Service, NIMASA in all PMS discharge operations as well as smuggling of PMS.

(Nairametrics)