Nigeria pays $14 mln for fuel in June despite subsidy removal - NNPC

By Libby George
LAGOS, Aug 31 (Reuters) - Nigeria's state oil company
recorded a 5.34 billion naira ($14 million) cost for fuel in
June, months after it changed its pricing method in an effort to
eliminate subsidies.
State oil company NNPC outlined the "under recovery" bill in
its June monthly statement, a term used to reference money lost
through fuel sales.
NNPC spokesman Kennie Obateru said the costs represented
temporary payments to marketers, who buy imported fuel and then
sell it on, for stocks they held when the subsidy was removed,
and would be spread over six months.
"Since the subsidy removal started with reduction in pump
price, marketers have to be paid the differential of the
(government) verified stock they held," he told Reuters.
In March, amid a global oil price crash, Nigeria cut its
gasoline pump price and said it had eliminated subsidies through
a new price cap that maintained government control, but allowed
prices to move with the market. Nigeria's gasoline prices had been kept artificially low at
145 naira ($0.48) per litre. A study supported by the British
government estimated Nigeria spent 10 trillion naira on
subsidies from 2006 to 2018, more than the individual budgets
for health, education or defence.
But in the past riots have broken out merely over rumours of
any increase.
The body tasked with setting pump prices, PPPRA, has not
published retail prices since March 31. Fuel importers said
there is a set monthly depot price, but it is not widely
distributed. Those who want to know it have to visit the depot.
The lack of transparency around the new gasoline pricing
mechanism has been a point of contention for those monitoring
whether the subsidy cost has been permanently eliminated and is
one of the sticking points over a much-needed World Bank loan.
= 380.5000 naira)

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Nigeria's costly fuel Subsidies https://reut.rs/3aaOpXG
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>