(Bloomberg) -- Nigeria’s national energy company spent almost two-thirds of its revenue subsidizing gasoline in the first quarter of the year and contributed no money to the government despite soaring oil prices.

Data published by the Nigerian National Petroleum Co. show how high oil prices are weighing down rather than boosting public finances in Africa’s largest crude producer. The World Bank and International Monetary Fund have repeatedly urged Nigeria’s government to remove the subsidy on gasoline, which is forecast to cost the country as much as $9.6 billion this year.

The NNPC spent 676 billion naira ($1.6 billion) in the first three months of the year on subsidies, against gross revenue of 1 trillion naira, according to a report it published late last month. 

Nigeria has very little refining capacity, prompting the NNPC to import all its gasoline via crude-for-fuel swaps with local and international traders, which the company sells at an increasingly steep loss to retailers and wholesalers. That makes pump prices in Nigeria among the lowest in the world, at 162.5 naira a liter.

The state-owned group is supposed to send excess funds each month to a pool that finances the federal and state governments in Africa’s most populous nation. The NNPC last year contributed about 15% of its gross revenue of 3.43 trillion naira to the fund, according to company data. 

The firm says it spent 1.43 trillion naira subsidizing gasoline in 2021 -- it is on track to nearly double that figure this year.

Nigeria has so far been unable to take advantage of the increase in the price of crude, which has surged since Russia invaded Ukraine in February. Brent crude was up 1.6% at $112.7 a barrel at 12 p.m. in London.

The country’s production has consistently fallen well short of the limits set by OPEC+, which currently stands at 1.735 million barrels a day.

A spokesman for the NNPC didn’t respond to a request for comment.

 

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