After the international crude oil benchmark, Brent advanced above $70 according to reports earlier in the month, industry experts see meagre benefits as subsidy payments gulp revenues.
The Federal Account Allocation Committee report for May, value shortfall, representing the amount the NNPC paid for subsidy, showed that the March receipts amounted to N111.97bn, while February’s totalled N60.40bn.
According to the FAAC reports for January, February and March, the total amount spent on subsidy for the first three months of 2021 stands at N197.74bn.
The Nigerian Governors Forum during its May 19 meeting suggested that the Federal Government end subsidy payments and peg the pump price of PMS at N380 per litre.
The governors reacted following the non-remittance of the NNPC into the April FAAC payments as most states required federal allocations to meet their expenses such as payment of salaries and building infrastructure.
Experts say with payment of subsidy on petrol imports, gain in oil price means little to the nation.
Aja said that current subsidy payments were politically motivated and not for economic benefits.
On the effects rising oil prices could have on the economy, he said, “The slope of the fossil fuel economy is trending downwards. The Gross Domestic Product is comprised mostly of services and agriculture.