Finance Minister: Petrol Subsidy Costs N18.39 Billion Daily.

Finance Minister: Petrol Subsidy Costs N18.39 Billion Daily.
Finance Minister: Petrol Subsidy Costs N18.39 Billion Daily.

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According to the Muhammadu Buhari-led administration, Nigeria spends N18.39 billion per day on fuel subsidies.

According to Six9ja, Zainab Ahmed, the minister of finance, budget, and national planning, said this on Thursday during a House of Representatives Committee probe into the Federal Government’s payments of gasoline subsidies.

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It is known that the House of Representatives Committee is looking at a subsidy scheme for petroleum products from 2013 to 2022.

The minister continued by saying that the government pays N283 per litre of PMS in daily fuel subsidies.

She said: “For 2023, the projection is that the average daily truck-out will be N64.96 million per day; that is about 65 million per day, using an average rate at open market rate of N448.20 and then a regulator pump price of N165 per litre. This gives us an average under-recovery, that is the difference between N165 and N448, of N283.2.

“So, just multiply the amount of litre per day, the open market exchange rate of naira to the dollar and then, the gap between the pump price and open market price, the total amount of subsidy per day is N18.397bn.

“So, if you are projecting for the full year, from January to December, it will be N6.715 trillion. If you are projecting for half a year, it will be 50 percent of that, 3.375tn. I said earlier in the recommendations that we sent to parliament for consideration on MTEF is half-year, that will be N3.357 trillion.

“Fuel subsidy is the difference between the pump price which is now fixed at N165 (per litre) and the landing cost which we are projecting at an average of N448 per litre in 2023. Even now, the cost is around that.

“So, the PMS 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.”

In the first half of 2022, petrol subsidy claims amounted to N2.6 trillion, which is above crude oil sale receipts from the Nigerian National Petroleum Company (NNPC) Limited.

The federal government has projected to spend N6.7 trillion on petrol subsidy payments in 2023.

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