Over the previous 14 months, President Bola Tinubu’s administration is believed to have spent N15.097 trillion on fuel subsidies. The startling amount exceeds prior spending on subsidies and has brought attention to the continuous financial strain that petrol subsidies have on the Nigerian economy.....KINDLY READ THE FULL STORY HERE▶
Nigeria imported 27.3 billion liters of gasoline overall between June 2023 and July 2024, on average, according to data from petroleum marketers and the National Bureau of Statistics, NBS.
The difference between the landing cost of fuel at N1,203 per litre and the retail price of N650 per litre at NNPC results in a N553 subsidy gap per liter.
Even though President Tinubu declared in his inaugural speech on May 29, 2023, that the fuel subsidy was “gone,” the amount spent on subsidies during his government has surpassed the N10.7 trillion that previous President Muhammadu Buhari spent from 2016 to the first half of 2023.
The depreciation of the naira, which occurred after the foreign exchange market was liberalized in 2023 and caused the currency to lose more than 60% of its value, is the reason for the rise in expenses.
Experts in economics have voiced worries about how long these subsidies will last.
“Determining the actual daily consumption is the first step to address the cost of under-recovery on the premium motor spirit (PMS) subsidy,” stated Dairy Hills CEO Kelvin Ayebaefie Emmanuel to Business Day.
“The other two major factors that have gone into the re-introduction of under-recovery is the price of crude oil and the exchange rate. The only way to achieve non-payment is to have the Naira to USD pair at 750 and Brent prices at $75 per barrel”, he revealed further.
Analysts caution that Nigeria’s economy would continue to be severely impacted by the high costs of subsidies until it can cease importing petroleum products and stable its currency rate.
The administration is faced with a difficult decision as it tries to strike a compromise between the needs of the economy and the public’s outrage over growing gasoline costs.
Meanwhile, former Vice President, Atiku Abubakar, has criticized President Bola Tinubu’s administration, accusing it of secretly maintaining the fuel subsidy on Premium Motor Spirit, PMS, despite earlier claims that the subsidy regime had ended.
In a statement posted on Monday via X, Atiku expressed deep concerns over what he described as a lack of transparency within the federal government.
He contrasted Tinubu’s public declaration of ending the subsidy with recent reports indicating that it is still in effect.
“The latest revelations circulating through credible media outlets regarding the federal government’s covert continuation of the subsidy on PMS represent another chapter in the opaque governance under President Bola Tinubu’s administration,” Atiku stated.
