The Nigerian National Petroleum Corporation has said it spent a total of N864.07 billion between January and September subsidising Premium Motor Spirit, popularly known as petrol.
This amount represents 31 percent of the total revenue of N2.7 trillion generated by the corporation between January and September.
Breakdown by months
Analysis from the report submitted by the corporation to the Federation Account Allocation Committee at its last meeting showed that the NNPC did not incur petrol subsidy cost in January, but spent N25.37bn on subsidising the product in February.
The subsidy cost rose to N60.39bn and N61.96bn and N126.29bn in March, April, and May respectively.
The NNPC spent N164.33bn, N103.28bn, N173.13bn and N149.28bn on PMS subsidy in June, July, August and September.
However, there was no provision for fuel subsidy in the 2021 budget.
Recall that since November last year, the price of PMS has remained unchanged despite the increase in crude oil prices in the international market.
The Minister of Finance, Budget and National Assembly, Mrs Zainab Ahmed, had in July during the public consultation of the Medium-Term Expenditure Framework/Fiscal Strategy Paper for 2022-2024 described the amount spent on subsiding petrol as a drain on the economy.
She said N900bn would be spent next year on subsidising the product, adding that such could have been spent on more productive sectors of the economy such as health, education and infrastructure.
Ahmed said, “This (subsidy) is costing us big time. We are spending over N150bn on subsidy, that means NNPC has to use that amount of money to pay for PMS and distribute it. That is money that the federation account can share.
“This is money that could have been available for education, health and infrastructure, reduce our borrowing, and increase the amounts that states and local governments are collecting.
“We are being penny-wise, pound-foolish to think that by giving this subsidy, that citizens are benefitting. But by the end of the day, the citizens are actually the ones that are carrying the brunt of the wealthy.
“Right now, we are subsidising consumption in Nigeria; we sell at N165 per litre when our neighbours are selling at N500 per litre. It is only the marketers that are benefiting by taking this product from Nigeria and selling it across borders. The common man is not benefiting.
“The transition is not an easy one, if we have to remove the subsidy. What are the alternatives? What can we provide for citizens? So, we are projecting we’ll be paying at least a N900bn subsidy for next year.”