- Now pays N12.88 per litre
- Plans 7000MW electricity boost in 18 months
Tobi Soniyi, Chineme Okafor in Abuja and Ademola Babalola in Ibadan
The federal government is now paying between N12.62 and N12.88 as subsidy for every litre of petrol consumed by Nigerians, the updated pricing template of the Petroleum Products Pricing Regulatory Agency (PPPRA) has shown.
The template, which was released monday by the PPPRA in Abuja, indicates that the gradual rise in subsidy paid to oil marketers for bringing products into Nigeria was necessitated by the recent increase in crude oil price to about $47 a barrel.
This means that for every litre of petrol consumed by Nigerians, the federal government would pay subsidy of N12.88 to the independent markets, while the Nigerian National Petroleum Corporation (NNPC) gets N12.62 for selling below the expected open market price.
The revelation of the federal government’s increment in petrol subsidy coincided with the declaration by Vice-President Yemi Osinbajo in Ibadan, the capital of Oyo State, that the administration plans to boost electricity supply to 7,000 megawatts (MW) within the next 18 months.
The vice-president, who also assured Nigerians that the implementation of the 2016 Budget would begin in a matter of days, said in spite of the challenges being faced, the federal government was determined to boost power supply and light up the country.
According to the updated PPPRA template, which is expected to cover the second quarter of 2016, the expected open market price of petrol had risen to N99.38 per litre for independent and major oil marketers and N98.62 per litre for retail outlets belonging to the NNPC.
The PPPRA stated that the expected open market price was the actual price of the product without subsidy and that it was based on the current exchange rate of N197 to a dollar. It said that at the current price of N86 per litre at NNPC retail outlets, the federal government was paying N12.62 per litre as subsidy on the product and N12.88 per litre as subsidy for other oil marketers’ price of N86.50.
A breakdown of the template revealed that for NNPC retail outlets and independent and major oil marketers, the landing cost of petrol imported into the country was N84.32 and N85.08 per litre respectively, it stated that the distribution margin, which includes retailers, transportation, bridging fund and dealers’ margin among others, stood at N14.30 for both the NNPC and other marketers.
According to the statement, this brings the current expected open market price to N98.62 and N99.38 for NNPC retail outlets and other marketers respectively.
In Ibadan, Vice-President Osinbajo said the federal government planned to generate 7,000MW of electricity for the nation within the next 18 months.
The vice-president spoke at the presentation of a book: “Nigeria: The Challenges of Growth and Development, an In-Depth Analysis by Experts,” held at the Trenchard Hall, University of Ibadan (UI), Ibadan.
Osinbajo stated that power remains a major challenge the federal government has been facing, and which the government was determined to solve.
He said the most important part of the budget would focus on ensuring that the weak aspect of the power value chain was restored.
Osinbajo said that the nation was facing the problem of conveying gas to the power plants, adding that the pipeline, which remained the easiest method, was frequently being vandalised.
He said: “Early in the life of this administration late last year and early this year, power generation was possibly at its best. Nigeria, for the first time was actually generating 5,000 megawatts, which was the first time it will happen in the history of the country.
“On February 14, the Forcados Export Terminal was blown off, effectively ensuring that 40 per cent of our gas that goes for power is no longer used for the purpose.
“This situation led to the immediate loss of 1,500 megawatts of power. It is our priority that the pipeline project is completed so that gas will be adequately supplied to the power plant.”
Osinbajo said Buhari had two weeks ago ordered the mobilisation of the military to protect pipelines in the country.
The vice-president also said that the federal government would, within a few days, begin the implementation of the 2016 budget, which he described as the most ambitious in the history of the nation.
According to him, the budget is not only ambitious in size but also more in its broad range of fiscal policies. “Our strategic implementation plan proposes 33 action points. The action points cut across six political tiers of security, governance, economic diversification, power, road and rail, oil and gas, ease of investments and social investment,” he said.
Osinbajo said that for the first time in three years, the nation would have 30 per cent of the budget going for capital expenditure, a percentage that was three times higher than the last budget.
He said that the capital expenditure would take care of several aspects of infrastructure, particularly rail, road and power.
According to him, the rail link between Lagos and Kano as well as the one between Lagos and Calabar would be captured.
He said the government had budgeted that by July, 65,000 youths would be trained in software and hardware, adding that government’s aim was to build a reservoir of technologists.
Osinbajo also listed the training of 370,000 Nigerians in various vocations, conditional cash transfer to the poor and loan facilities for market women as part of the programmes to be expected.
He said that the administration would ensure that corruption has consequences, adding that no public officer who steals would go scot-free.
The vice-president described the moment as that which Nigerians must come together to ensure that things work in the building of the nation of everyone’s dream.
Reviewing the book, Prof. Jide Osuntokun said the writers had carefully highlighted the various challenges bedevilling the nation and how they could be corrected for national growth and development.
“Nigeria’s problem is structural and systemic, and it could be structurally and systematically addressed,” he said.
Osuntokun said that the book articulates various ideas of the writers which are aimed at building an egalitarian society.
Also, Mr Oba Otudeko, the chairman of the event, said there was no better time to discuss the development of the nation than now when they have the company of people who care.
He described the “House of Lords, Nigeria” as a collection of people whose interest of Nigeria and the welfare of the citizens were paramount in their minds.
“Let me tell them that they are on the right path and they should not lose sight of the development of the country.
“This book presents a compendium of opportunities. I think it is worth having,” he said.
According to the News Agency of Nigeria (NAN), the 209-page book is a collection of the speeches of 11 writers from various spheres of life.
The House of Lords, Nigeria was founded 50 years ago and currently parades 34 members, with Prof. Ayodele Desalu as the “Leader.”
The event was attended by prominent citizens, including investment banker, Mr Fola Adeola; Prof. Idowu Olayinka, the Vice-Chancellor, UI; and Prof. Oladipo Akinkungbe among others.