With continued plummeting of crude oil prices, Nigeria now records a monthly average of N15.859 billion as under-recovery on importation of petrol or Premium Motor Spirit (PMS) into the country.
Though the Federal Government claimed it had exited the era of subsidy payment on imported PMS, data from the NNPC showed an under-recovery of N190.314 billion between January 2017 and January 2018.
Under-recovery has been described as the losses that oil companies incur due to the difference between the subsidised price at which oil-marketing companies sell certain products and the price, which they should have received for meeting their cost of production.
Under-recovery or over-recovery in petroleum products import was introduced after the Federal Government scraped subsidy on PMS.
Apart from the huge cost of subsidising the product, the country’s consumption increased from 28 million litres in 2017 to 60 million during the first quarter of 2018, according to latest consumption data from the National Bureau of Statistics.
This has stifled efforts by the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, who claimed to have brought down PMS consumption from 50 million litres a day to about 28 million litres per day in 2017.
Kachikwu had said that the current administration was able to block fraud impacted volume of petrol in 2016, which was nearly 40 per cent of the country’s consumption, reducing consumption to 28 million litres.
The Guardian learnt that the same forces the minister claimed have been tackled have returned and are now diverting petrol from Nigeria to neighbouring countries.
This means half of the petrol being imported into the country finds its way into neighbouring states.
Specifically, a breakdown of the monthly under-recovery suffered by NNPC showed that the country incurred under-recovery of N45.782 billion in January 2018 alone.
Further analysis from NNPC’s Financial Report in January 2018, revealed that the country’s under-recovery stood at N37,263,846,591.