The Federal Government will spend an average of N1.124 billion monthly (N570.8 million daily) as subsidy for Premium Motor Spirit (PMS) also known as petrol, even when the four refineries in Nigeria run on full steam, New Telegraph has learnt. Checks by our correspondent revealed at the weekend that the subsidy is to be paid on 20 million litres shortfall from PMS production at the refineries in Port Harcourt, Warri and Kaduna by the time they start their full capacity production.
A document from the Nigerian National Petroleum Corporation (NNPC), owner of the refineries, showed that the installations could only produce 20 million litres of fuel even when they operate at full capacity.
“The consumption and internal refining capacity of Premium Motor Spirit (PMS) stand at ratio 2 to 1. While the daily consumption is 40 million litres, the total capacity of refineries is 20 million litres,” the document stated in part. With the $47 per barrel average price of crude at the weekend, the Petroleum Products Pricing Regulating Agency (PPPRA) puts the Expected Open Market Price (OMP), which is landing cost plus margins at N115.54 on its pricing template last updated on September 3, 2015. Consequently, the subsidy on a litre of PMS is N28.54, translates to N570.8 million on 20 million litres if the prices of crude remain as low as $50 per barrel.
President Mohammadu Buhari had ruled out the removal of subsidy.Data from the Pipelines and Products Marketing Company (PPPMC) had put the country’s total fuel consumption at 40 million litres daily. Group Managing Director of NNPC, Dr. Ibe Kachikwu, at the end of his facility visits to the refineries, confirmed that the 20 million total capacity fuel production could only be met when the 37-year old Warri Refining and Petrochemical Company (WRPC) meets up with the 90 days ultimatum, which he gave the facility to produce at full capacity.
Acting Managing Director of WRPC, Solomon Ladenegan, said that measures had been put in place to ensure that the plant is back in full operation by early November in good time for the three months fast- track moratorium. The Warri Refinery, which has been undergoing phased rehabilitation exercise, was shut penultimate week due to some technical hitches in one of its units.
Speaking at the end of facility tour of the refinery and the adjoining PPMC Jetty and Depot in Warri, Delta State, Kachikwu, according to a statement, had charged the management and staff of the company to ensure that the plant is streamed back to full active service within the projected period.
“The GMD noted that he is ready to provide the management of the facility necessary support to enable them meet the fasttrack target,” the statement signed by Group General Manager, Group Public Affairs of NNPC, Ohi Alegbe, read. “So, whatever you need to do to get your refinery back on track, please do it now because this is the time.
It’s a 90 days fasttrack programme and whatever you need me to do to make that happen, let me know,’’ the GMD said. Dr. Kachikwu also enjoined the management of the plant to resuscitate the Petrochemicals plant, which was commissioned in March 1988. On the state of PPMC storage facility, he promised to end the era where the company relies heavily on private depots to store a bulk of its petroleum products.
