Fuel subsidy costs N1.1tr between Feb and Nov
By Jeph Ajobaju, Chief Copy Editor
Fuel subsidy from February to November cost N1.16 trillion, gleaned from the latest Nigerian National Petroleum Corporation (NNPC) data; and its remittances to the Federation Accounts Allocation Committee (FAAC) dipped by N1.78 trillion.
The NNPC classifies subsidy as under-recovery, as it has reiterated several times that it has no authorisation from the National Assembly (NASS) to pay subsidy.
The data shows the monthly value of fuel subsidy this year as
- January – no record
- February – N25.374 billion
- March – N60.396 billion
- April – N61.966 billion
- May – N126.298 billion
- June – N164.337 billion
- July – N103.286 billion
- August – N173.132 billion
- September – N149.283 billion
- October – N163.709 billion
- November – N131.4 billion
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Shortfall in NNPC remittances
The NNPC spends so much on petrol subsidy because it has been the sole importer of the commodity for about four years.
Other marketers stopped importing fuel due to their inability to access foreign exchange in dollars, wrote The PUNCH which reported the figures.
The FAAC projected N122.767 billion as monthly remittance from the NNPC but the target was never met for all of the 11 months.
A total N2.30 trillion was anticipated from the NNPC to be shared by the three tiers of government, but only N522.203 billion was remitted. A shortfall of N1.78 trillion.
The monthly remittances are as follows:
- January – N90.86 billion
- February – N64.161 billion
- March – N41.184 billion
- April – no remittance
- May – N38.608 billion
- June – N47.162 billion
- July – N67.28 billion
- August – N80.03 billion
- September – N67.533 billion
- October – N14.85 billion
- November – N10.536 billion
Subsidy debate
Abuja plans to phase out fuel subsidy from January 2022 amid intense debate for and against. Governors support subsidy removal but Labour and others oppose it.
Nasir el-Rufai (Kaduna State Governor)
“The high cost of fuel subsidy is not reasonable and this is why the Nigerian Governors’ Forum met and agreed to back the federal government’s transport palliative scheme as well as stop petrol subsidy.
“The Nigerian Governors’ Forum met and agreed to support the federal government’s social compact. Withdraw this subsidy by February.
“Use the N250 billion per month that would have been lost between February and May to do this conditional cash transfer that would put money in the pockets of Nigerians and alleviate not only the cost of transportation but the 2-3 per cent job inflation that is expected when the subsidy is eliminated.
“We cannot sustain it. We cannot continue with it.
“I don’t want to predict what will happen when 35 out of 36 states cannot pay salaries of civil servants, or even have any money to run the government. We will not have enough money to pay salaries. Already, some states are building up arrears, even oil-producing states are struggling to pay salaries.”
Ukadike Chinedu (Independent Petroleum Marketers Association of Nigeria (IPMAN) National Public Relations Officer)
“The federal government is talking about removing subsidy but not talking about the adverse effects of the removal of subsidy. It will affect other commodities, the standard of living among the majority of citizens will be worse.
“And this is because if PMS rises to N365/litre, local transportation will be going for over N1,000 or thereabout and the standard of living and the cost of goods in the market will skyrocket.
“This will cause heavy inflation. So the NNPC has to look at the adverse effects of this move to remove subsidy.”