Petrol Subsidy Falls From Over N2 Billion To N576 Million Daily

The subsidy on every liter of Premium Motor Spirit consumed in the country has dropped from a high amount of N51.61 per liter on June 11, 2015 to N14.39, data obtained from the Petroleum Products Pricing Regulatory Agency on Sunday revealed. 

This is partly due to the sustained decline in global crude oil prices, which have continued to trade below the $50 per barrel mark in recent weeks. The global benchmark Brent crude, which fell below $50 per barrel in January, rebounded to $65 in June, pushing up the subsidy on petrol. However, Brent traded around $48 per barrel on Sunday.

By multiplying the estimated 40 million liters of petrol consumed across the country on a daily basis with the current amount spent on subsidizing the product, it means that the government spends about N575.6m on subsidy, down from N2.06bn in June 11. Subsidy refers to the money paid, usually by the government, to keep prices below what they will otherwise be in a free market system.