…Highest in 25yrs
The President Bola Tinubu-led administration plans to spend N6.8 trillion on fuel subsidies between August 2023 and December 2024, representing a 17-month period, according to reports.
This development comes over one year after the statement “fuel subsidy is gone” by President Tinubu.
This is as the President has reportedly approved that the Nigeria National Petroleum Company Limited (NNPCL) uses its dividends to offset subsidy bills.
According to the report, the NNPCL had informed the President that due to the subsidy payments, it was currently unable to pay taxes and royalties into the Federation Account, referring to this as a “subsidy shortfall/FX differential”.
It was revealed that the N6.8 trillion is the highest figure ever to be spent by any administration on fuel subsidies between 2005 and 2022, when subsidy payment was made by the Federal Government on a full year basis.
Data by Nigeria Extractive Industry Transparency Initiative (NEITI) shows that the highest amount spent on subsidy by the Nigerian government between 2005 and 2021 was incurred in 2011 when a sum of N2.1 trillion was paid.
In 2022, however, the Nigerian government paid N3.36 trillion as fuel subsidies, meaning that between 2005 and 2022, the highest subsidy paid stood at N3.36 trillion.
Observers say assuming the subsidy payment of 2022 extends to 17 months beyond a twelve months figure, using average figure estimation, the government would have paid N4.7 trillion for fuel subsidies.
With the Government planning a N6.8 trillion subsidy for August 2023 and December 2024, it would mean that the N6.8 trillion bill is the highest since 2005.
This development on the approval of the use of the NNPCL dividends to pay fuel subsidies comes amid different denials of the government that fuel subsidies were still existent.
The payment of such amount of money for subsidies by the Government may have been worsened by a declining dollar to Naira rate in the country, this is given that fuel is imported as Nigeria’s refineries have continued to falter.
