The Petroleum Products, Pricing and Regulatory Agency (PPPRA) has said that over N8.97 trillion has been expended on fuel subsidy under the Petroleum Support Fund (PSF) scheme between 2006 to 2016, Daily Trust reports.
The PSF scheme was introduced by the former President Olusegun Obasanjo led government as a regulatory mechanism put in place to insulate Nigerians from the fluctuation in international crude and products prices, and stabilize domestic utilization of petroleum products.
Speaking at the just concluded Oil Trade and Logistics conference in Lagos, Executive Secreatry, Abdulkadir Saidu Umar represented by Mr. Olasupo Agbaje, General Manager Corporate Services, attributed the huge spending to non-functional and low capacity utilization of refineries resulting in inadequate supply from local refineries.
He said the existing four local refineries with 445,000barrels per day capacity only contributed about 10% in the past five years to the national Premium Motor Spirit or petrol supply. Umar said that the country currently operates the Appropriate Pricing Framework (APF), which took effect in May 2016 adding that the APF is to reflect prevailing market fundamentals in pricing of petroleum products in the country.
He said given the market trends in 2016 due to the forex challenges and the steady rise in crude oil prices which resulted in an upward movement of refined petroleum products prices, the then prevailing PMS approved pump price of N86.50/litre was not tenable and had to to be reviewed to N135.00-N145.00/litre to reflect prevailing market fundamentals.topics from