The Federal Government has secretly resumed the payment of fuel subsidy to keep the pump price at N620 per litre, amid rising global oil prices and naira depreciation.
Newsflash Nigeria reports that the government paid N169.4 billion as subsidy for the month of August, using part of the dividends from the Nigerian Liquefied Natural Gas (NLNG).
According to Bloomberg, the international oil benchmark Brent crude futures crossed the 95 per barrel mark on Wednesday, putting pressure on the domestic fuel market. The landing cost of petrol in Nigeria has increased from N529 per litre in July to about N728.64 per litre in August, based on the exchange rate of N920/ and the international price of $0.792 per litre.
The Federal Account Allocation Committee (FAAC) document, obtained by Newsflash Nigeria, revealed that the NLNG paid $275 million as dividends to Nigeria via NNPC Limited in August. NNPC Limited used 220million (N169.4billion at N770/) out of the $275 million to subsidize the fuel consumption in the country. NNPC Limited retained $55 million.
A source at the Major Oil Marketers Association of Nigeria (MOMAN) told Newsflash Nigeria that there was an instruction not to disclose the pricing update because the government had said there would be no price increase. The source said that a subtle deal was struck with oil marketers to maintain the current price.
A senior government official also confirmed to Newsflash Nigeria that the subsidy payment had approval from above and was necessary to avoid public outcry and crisis.
The official said that the government was hoping for stability in the market once the Dangote refinery, which has a capacity of 650,000 barrels per day, starts production in October.
Newsflash Nigeria recalls that last month President Bola Tinubu had ordered for the price of fuel to be stalled at N617 per litre, and NNPC Limited had also confirmed there were no intentions of hiking prices further.
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