Nigeria Spends N18bn Daily on Petrol Subsidy, Finance Minister Reveals

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed on Thursday disclosed that the federal government spends an estimated N18.397 billion daily on petrol subsidy.

Ahmed, who revealed this to the House of Representatives ad-hoc Committee investigating subsidy payments regime from 2013 to 2022, said a total sum of N6.210 trillion had been paid as fuel subsidy to independent oil marketers from 2013 to 2021.

The Minister who made the disclosure while addressing the lawmakers at the resumed hearing, said the ministry paid the sum of N1.774 trillion from 2013 to 2016, while the remaining N4.436 trillion, came under PMS under-recovery by the Nigerian National Petroleum Company (NNPC) Limited.
On the funding of subsidy payments, Ahmed explained that payments that have been made to oil marketers were directly from the domestic excess crude account through the deduction of Sovereign Debts Instruments (SDI).

She further explained that the instrument which was approved by the then President in 2010, also had instances where funds were transferred from the consolidated revenue fund to the domestic excess crude account for subsidy payments.
She informed the lawmakers that the ministry was not in the position to provide statement of account of the NNPC and its affiliates on the transfer of funds to the treasury single account.
Speaking further, the minister lamented the burden of petrol subsidy on the government, hence she recommended a stakeholders’ meeting on the way forward.

“When we engage the leadership of the National Assembly, we recommended a national stakeholders’ forum that will bring all major stakeholders together, including all the political parties.
“We submitted that to the Federal Executive Council and it gave its approval and the government is working on that. It is important so that if all stakeholders agree, we know what exactly we are dealing with.
“I do hope that is done very soon because we cannot continue to carry the burden. So, the petrol subsidy we are carrying today in the nation is around N283 per litre, that is what we are carrying; so it is the difference between the pump price and the landing cost of petroleum products in the country,” Ahmed added

Reacting, a member of the Committee, Hon. Ibrahim Isiaka questioned the rationale behind NNPC’s deduction from 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.
Also, the Chairman of the Committee, Hon. Ibrahim Aliyu faulted the formula for the computation of the subsidy payments.
He ruled that documentary evidence of the beneficiaries of the N500 billion should be provided.
He said, “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 MTEF is already before the National Assembly.

“You see, if you look at the average daily truck-out quantity latest, 64,964,400, in 2012 there was a report and the total consumption was put at 31,500, so it’s very difficult to imagine how you can have a near 100 per cent increment in consumption within a period of 10 years.”
He also faulted the fact that even during public holidays as well as the period of the COVID-19 when there was lockdown and limited movement the petrol consumption rate remained same.

Meanwhile, the Federal Inland Revenue Service (FIRS) told the House of Representatives special adhoc Committee that it was not in its place to utilise funds of the government.
The Executive Chairman of FIRS, Muhammad Nami who was represented by the agency’s Coordinating Director, Compliance Support Group, Dr. Dick Irri at the resumed investigative hearing stated that their statutory mandate was to collect taxes and also enforce same to be paid to the federal government.

According to Nami, the role of the Service as provided by its Establishment Act was confined to the assessment of taxpayers, collection of taxes, accounting for and enforcement of taxes that were due to the government of the Federation.

Udora Orizu in Abuja

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