FG spends N1.593trn on fuel subsidy, refinery gulps N54.66bn in 6 months

The Federal Government has spent N1.593 trillion on fuel subsidy in the first six months of 2022, according to the latest data available.

The Nigerian National Petroleum Company Limited (NNPC) presentation to the Federation Accounts Allocation Committee meeting for July 2022 showed that subsidies on petrol were paid to the tune of N1.593 trillion from January to June this year.

It was also gathered that NNPC spent N54.66bn on refinery rehabilitation within the same timeframe.

The company disclosed that after its transition to commercialised entity, subsidy on petrol was now a burden of the Federal Government and not within it’s mandate.

The analysis of the July presentation to FAAC showed that fuel subsidy which is called under-recovery/value shortfall, as described by NNPC, upped to N1.593tn in the first half of 2022.

According to the report, the breakdown of monthly expenses on fuel subsidy are N210.38bn spent in January; N219.78bn in February; N245.77bn in March; N271.59bn in April; N327.1bn in May and N319.18bn in June.

Similarly, the oil company spent N9.11bn in January, no expenses in February, while it invested another N9.11bn on the facility in March.

On the remaining months, it spent N9.11bn in each of the months of April and May 2022 on refinery rehabilitation, while investing N18.22bn on the plant in June.

Earlier in April this year, the Minister of State for Petroleum Resources, Timipre Sylva, said the April 2023 completion date for the rehabilitation of the Port Harcourt refinery was achievable which would enable refining of 60,000 barrels of crude by early next year.

“This project kicked off second quarter last year and where they are now is quite impressive. It is on schedule. The commitment is to deliver 60,000 barrels per day from this refinery by the first quarter of next year, and, of course, we are quite happy,” Sylva had stated while inspecting the facility.

NNPC had signed the contract with Tecnimont SPA for the $1.5bn to rehabilitate the Port Harcourt Refining Company in April 2021 with a promise for completion in 18 months.

The Star