News Story

  • Home
  • NASS Set To Receive Executive Proposal of N3 Trillion Fuel Subsidy Payment

NASS Set To Receive Executive Proposal of N3 Trillion Fuel Subsidy Payment

Share on facebook
Share on whatsapp
Share on twitter
Share on email
Share on print

The Federal Executive Council (FEC) on Wednesday, 26th January, approved the submission to the National Assembly of an incredibly high N3 trillion as fuel subsidy payment in Nigeria for 2022. According to FEC, the N3 trillion subsidy payment follows its acceptance of budget estimates presented to it by the Nigerian National Petroleum Corporation (NNPC). In the existing 2022 National Budget, the government had indicated that the half year subsidy payment for petroleum products would be N443 billion. Nigerians expected that even if the government was to pay subsidy for the balance of the six months of 2022, the subsidy sum would only be a doubling of the previous six months budget estimate of N443 billion. It is therefore confounding for all that this planned supplementary budget to the National Assembly would jack up subsidy payments by 400%. With this development, the Federal Government is to spend an additional N2.557 trillion. The government’s proposal to pay full subsidy for 2022 comes from pressure put on it by the leading labour movement in the country, the Nigerian Labour congress (NLC), which threatened nationwide strike and shutdown. The government apparently to stave off the planned protest balked and returned to full subsidy with the N3 trillion astronomical figure.

Nigerians are worried about government claims to payment of subsidy. In spite of a much-touted liberalisation of the petroleum sector, especially downstream, the government has refused to hands-off its deep and opaque involvement in the petroleum sector. President Muhammadu Buhari himself is the substantive Petroleum Minister. Addressing a press conference a few days ago,  Minister of State for Petroleum, Timipre Sylva stated that the quoted estimate of  Nigeria’s daily petrol consumption (at 65.7 million litres per day) is inflated. His statement confirms fears among many Nigerians and industry watchers about the opaqueness of Nigeria’s petroleum sector. The suspicion about Nigeria’s subsidy regime is worsened by the fact that petrol importation into the country is conducted solely by NNPC. Indeed, with the 2023 elections fast approaching, the suspicions are deepened with observers wondering whether there is a connection between the forthcoming elections and the monumental rise in planned subsidy payments by the NNPC and the government. The situation is made more worrying by the fact that only a few months ago, President Muhammadu Buhari assented to the long-delayed Petroleum Industry Act (PIA), which was intended to fully divest government interest from the sector.

It will be recalled that on 31st December 2022, President Muhammadu Buhari signed the Appropriations Bill of N17.126 trillion into law. This amount is expected to increase with the added subsidy amount of N2.557 trillion.