…Differ on computation of N6.79tr fuel subsidy
The Federal Government, yesterday, disclosed that it is currently paying N283 as a subsidy on every litre of premium motor spirit (PMS) imported into the country by Nigerian National Petroleum Company (NNPC) Limited.
The Minister of Finance, Budget and National Planning, Dr. Zainab Ahmed, who disclosed this at the resumed investigative hearing into the Ad-hoc Committee investigating the payment of the controversial fuel subsidy payment between 2013 and 2022, chaired by Hon. Ibrahim Aliyu, who picked holes in the Minister’s presentation on the projected N18.397 billion fuel subsidy payment per day.
She explained to the lawmakers that “fuel subsidy is the difference between the pump price, which is now fixed at 165, and the landing cost – which we are projecting at an average of N448 per litre in 2023; even now the cost is around that. So, the PMS subsidy we are carrying today in the nation is around N283 per litre; that is what we are carrying. It is the difference between the pump price and the landing cost of petroleum products in the country”.
In an intervention by a House member, Hon. Isiaka Ibrahim, queried the rationale behind NNPC’s deduction from the source the sum of N1.66 trillion against the sum of N1.15 trillion paid to oil marketers in 2021, leaving an excess of N500 billion by fiat. Hence, the Committee requested documentary evidence of the beneficiaries of the N500 billion paid by NNPC.
In a swift reaction to the Minister’s submission, Hon. Aliyu contested the formula for the computation of the fuel subsidy saying: “the N6.7 trillion required for 2022. Why I’m disturbed is because the 2023 financial year is approaching by September; we will be expecting Mr. President’s Budget submission, and the Medium-Term Expenditure Framework, (MTEF), is already before the National Assembly.
Speaking earlier, the Finance Minister observed that the MTEF has been submitted to the National Assembly leadership before embarking on the two months annual recess.
“One thing that stands out in the MTEF was that if the nation holds on to fuel subsidies as it is designed now, we will incur, from January to December, subsidy costs of N6.4 trillion. The situation is not desirable and it’s not sustainable; it is putting the country in a very serious, dire, financial situation, and we do hope that we will be able to exit this subsidy regime in the shortest possible time.
“The N3.35 trillion in the approved MTEF that is now before the National Assembly for consideration could’ve been funds that will apply to other vital sectors of the economy such as health, and education. We are carrying a burden that, as citizens, we have to assess whether it’s beneficial for us to continue to do so”.
