Petrol Subsidy Gulps N4.8trn Annually – FG

The Federal Government through the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) stated on Tuesday that fuel subsidy was gulping about N4.8tn from its purse.

The Chief Executive Officer, NMDPRA, Farouk Ahmed, disclosed this at the ongoing Energy and Labour Summit organised by PENGASSAN in Abuja.

“The financial implication of PMS subsidy rose to over N400bn monthly which translates to over N4.8tn ($6bn) annually, making it unsustainable in the short to medium term.

“Subsidy on PMS hugely impacted government revenues available to all tiers of government leading to inability of the government to meet their obligations.

“Last year alone, Nigeria imported a total of about 23.5 billion litres of PMS. Our average daily truck out over a period of eight years stood at over 55 million litres per day, with a peak of 66.7 million litres recorded for the year 2022.

“In the year 2022, Nigerian government expended more than N4tn on PMS subsidy. This amounted to about 20 per cent of fiscal budget for the year, presented a strain on the fiscal viability of the government, and became a major obstacle to inclusive participation in downstream petroleum sector,” Ahmed stated.

He pointed out that fuel subsidies had been in Nigeria since the 1970s when government routinely sold petrol to Nigerians at below cost, but stressed that it had to be stopped.