Petrol subsidy moves to N364m/day

Sir: A swing from a subsidy of N16.18 per litre in Q1 2016 to a subsidy of N9.05 per litre, explains the 35.2 per cent volatility of open market price of petrol. Furthermore, press sources revealed that payment of subsidy appreciated from N232 million per day two weeks ago to N364 million per day at present. To this effect, Mrs. Sotonye Iyoyo, acting Executive Secretary of PPPRA explained that the funds from over-recovery in the Q1 shall be duly utilised for whatever noticeable imbalance in April 2016 in line with the Price Modulation Principle (PMP).

On the assumption that Nigeria’s expended N232 million per day on fuel subsidy for the first two weeks of April and N364 million per day remaining two weeks (Ceteris paribus), it would mean an aggregate subsidy of about N8.34 billion. This would result in the depletion of the Sovereign Wealth Fund (SWF); thus, making the nation less liquid and more susceptible to external economic shocks.

Jeremiah Akinrinde
Twitter:@ibukunoluwaIbk