Subsidy not ‘gone’ as FG confirms N5.4tr spent on petrol

• Stop deceiving Nigerians, Atiku tells Tinubu
• Inconsistent subsidy policies fuel public mistrust, says Nwadishi

After repeatedly denying the return of subsidy on Premium Motor Spirit (PMS), the Federal Government, yesterday, said a whopping N5.4 trillion was paid to subsidise the product.

Former Vice President, Atiku Abubakar, in a statement, in Abuja, yesterday, urged President Bola Tinubu to stop deceiving Nigerians about his administration’s true position on fuel subsidy.

But the Executive Director, Centre for Transparency Advocacy, Faith Nwadishi, criticised the government for its inconsistent handling of fuel subsidies, which “has continued to erode public trust.”

Although Nigeria has reduced petrol consumption to 40 million litres daily, the subsidy payment is almost the amount spent in 2023 (N3.6 trillion) and 2022 (N2 trillion).

This came as the Ministry of Finance indicated trouble ahead for the country’s oil production, insisting that it remained below 1.4 million barrels per day against claims by the Group Chief Executive Officer (GCEO) of Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, that oil production rose to 1.7 million barrels per day in May.

Nine months ago, barely four months after Tinubu, on May 29, 2023, declared at his inauguration that “subsidy is gone”, The Guardian had reported that the scheme returned but the government persistently denied the claim.
AS presentation by the Minister of Finance, Wale Edun on the Accelerated Stabilisation and Advancement Plan (ASAP) showed that all is not well in the oil and gas sector, which is presided over by Tinubu and two other junior ministers.

With the Consumer Price Index at 33.7 per cent and the highest in three decades, high interest rates and foreign exchange rate hovering above N1,470, the ASAP document said: “At current rates, expenditure on fuel subsidy is projected to reach N5.4 trillion by the end of 2024.”

Edun, who decried the slow pace of investment into the oil sector, had earlier in the week said the subsidy removal was gradual.

National President, Natural Oil and Gas Suppliers Association of Nigeria (NOGASA), Benneth Korie, who had decried the prevailing development in the sector, said: “We are suffering too much. We are losing money daily. That is what we do. We borrowed money from the banks and some of us cannot pay again.

“We are in trouble. There is a need for the government to come into this matter urgently; otherwise, we will have a problem. Definitely, the price of PMS will go up as much as the dollar price goes up. If you are exchanging $1 for N950, it will go up.”

ATIKU explained that contrary to the President’s public posturing about removing fuel subsidy, his administration had been secretly paying trillions of naira as subsidy on petrol.

He said, “Tinubu, at his inauguration on May 29, 2023, announced the abolishment of the subsidy on PMS, popularly known as petrol. Ever since, it has been a bragging right of Tinubu and officials of his administration.”
NWADISHI highlighted that the recent announcement by the minister regarding subsidy payments was unsurprising amid ongoing confusion and a lack of transparency surrounding fuel subsidies.

She expressed concern over the government’s actions, stating, “What has happened will further drive down the mistrust citizens have in the government.”

Despite the Petroleum Industry Act (PIA) declaring the end of subsidies last year, subsidies continue to be paid, raising questions about actual savings and the high cost of PMS.

“We sent out an FOI request to the Ministry of Finance, NNPC, Office of the Accountant General and Central Bank of Nigeria (CBN) to provide data on subsidy savings. The only response we received was from CBN, directing us to the Accountant General’s office,” Nwadishi revealed.

She added that the promised palliatives from subsidy savings remained unseen, leading to further scepticism, as increased state allocations due to subsidy removal add to the confusion.

“So if we are still paying subsidy, how come we are still paying that much? And where are the palliatives that the government said they have been giving because of the savings we have had from subsidies?

“Also, the government said because of the removal of subsidy, monthly allocations to states have increased. So, where was that money coming, from if we are not making any savings from subsidy and the government is still paying subsidy? So it becomes very troublesome for me to understand why these things should continue to happen,” Nwadishi questioned.