PETROL subsidy has reduced the Nigerian National Petroleum Corporation (NNPC)’s remittance to the federation account to N14. 85 billion for the month of October.
This figure fell short of the monthly projection of N209. 3 billion.
Analysts knowledgeable about the oil and gas sector said the poor remittance was as a result of spiraling monthly subsidy payments gulping an average of N120billion monthly.
Further insight into the corporation’s report revealed that the N14.85 billion remitted in October was the least amount remitted from January to October 2021.
The report showed that the sum of N90.86 billion was remitted in January, N64.161 billion in February, N41.184 in March.
Nothing was remitted in April, but N38.60 billion, N47.162 billion, N67.28 billion, N80 billion, and N67.53 billion were remitted in months of May-September respectively.
This brings the total revenue remitted by the corporation to N511.667 billion in 10 months, which shows a huge decrease from the N2.093 trillion projection for the 10-month period.
According to the corporation, no crude oil export revenue was recorded in the month under review, despite producing an average of 1.417 million barrels per day in the month of September.
Nigeria’s actual crude oil production has remained below the 2021 projection of 1.86mb/d.
Total production for the months of January, February, March, and April were 1.58 mb/d, 1.62mb/d, 1.65mb/d, 1.63mb/d respectively.
Data from the Organisation of Petroleum Exporting Countries (OPEC) monthly oil market report showed that Nigeria produced 1.41 mb/d, 1.39mb/d, 1.38mb/d, 1.27mb/d in the months of May, June, July, and August respectively, which falls below 1.54 OPEC production quota.
Nigeria faces the twin dilemma of not meeting up with the allocated quota and payment of corrupt-ridden subsidy.
A member of the Presidential Economic Advisory Council Bismarch Rewane has described subsidy as ‘reverse taxes,’ expressing concern that the spiraling PMS figure on subsidy payment did not reflect the current economic reality across the country.
“Subsidies are reverse taxes and they distort the allocation of resources. It is said and is believed that we consume daily 93 million litres of fuel. I don’t know where that figure is coming from.”
Former Chairman of the Major Oil Marketers Association of Nigeria (MOMAN) Adetunji Oyebanji also told The ICIR that the market forces must determine demand and supply, not political consideration.
“Nigerians are not alienated from market forces. We must do the right thing and have courage to do so,” he noted.
The Federal Government has been on borrowing spree as the economy faces avoidable pitfalls with unsustainable subsidy payments which deprive the nation key developmental funds.
Nigeria’s total public debt hit $87 billion in June 2021, according to the Debt Management Office (DMO), and the government is gearing to borrow more.
Debt servicing to revenue stood at 97 per cent in 2020, showing the country’s precarious financial situation.
But the Federal Government is still paying subsidies on petrol and electricity, which gulp billions of naira.