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Fuel Subsidy Payment Rises To N1.5trn Mark As Refineries Still In Decrepit Conditions

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The Federal Government subsidised Premium Motor Spirit, often known as fuel or petrol, with N1.593 trillion between January and June 2022, according to the most recent data on the subject seen in Abuja on Monday, August 15.

Additionally, it was learned that over the course of six months, the Nigerian National Petroleum Company Limited invested N54.66 billion in the repair of refineries.

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According to data collected from the NNPCL’s presentation at the July 2022 meeting of the Federation Accounts Allocation Committee, fuel subsidies began in June. Last month, the corporation changed from being a publicly traded oil company to becoming a business.

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In July, it also made it apparent that the Federal Government, rather than the State Government, was now in charge of providing fuel subsidies.

An analysis of the July presentation to FAAC showed that fuel subsidy or under-recovery/value shortfall, as described by NNPCL, rose to N1.593tn in the first half of 2022.

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Figures from the report indicated that the amounts spent as subsidies on the commodity in January, February, and March was N210.38bn, N219.78bn, and N245.77bn, respectively.

A total of N271.59bn, N327.1bn, and N319.18bn were spent as fuel subsidies in April, May, and June respectively.

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The oil company spent N9.11 billion in January on refinery renovation but didn’t spend any money in February or March. Another N9.11 billion was spent on the facility.

It spent N9.11 billion on refinery rehabilitation in each of the months of April and May 2022, and N18.22 billion on the plant in June.

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The Port Harcourt refinery’s restoration is expected to be completed by April 2023, according to Chief Timipre Sylva, Minister of State for Petroleum Resources, who also predicted that the facility will process 60,000 barrels of crude by the beginning of next year.

Sylva had stated while inspecting the facility;

This project kicked off second quarter last year and where they are now is quite impressive. It is on schedule. The commitment is to deliver 60,000 barrels per day from this refinery by the first quarter of next year, and, of course, we are quite happy.

The Port Harcourt Refining Company’s $1.5 billion renovation scheme was officially agreed upon by the NNPC and Tecnimont SPA in April 2021. The plant was expected to be finished in 18 months.

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According to the company’s July FAAC presentation, the gross domestic crude oil and gas income for the month of June 2022 was N391.529 billion.

In contrast to the outstanding balance carried forward, which was N1.01 trillion, it was noted that the value deficiency on the importation of PMS recovered from June 2022 revenues was N319.176 billion.

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