Nigeria’s Fuel Subsidy Controversy: A Multibillion-Dollar Tab
In a shocking revelation, the Nigeria Extractive Industries Transparency Initiative (NEITI) has disclosed that the Nigerian government spent a staggering N15.57 trillion between 2006 and 2023 on the Petrol Motor Spirit (Petrol) subsidy. This figure has sparked a heated debate about the necessity and impact of the fuel subsidy program.
According to NEITI’s report, the year with the highest amount paid for fuel subsidy was 2022, with a whopping N4.714 trillion paid out. The report also revealed that the federal government is owed $6.071 billion and N66.4 billion in unpaid revenues from the oil and gas sector as of June 2024.
Despite President Bola Ahmed Tinubu announcing the removal of fuel subsidy in May 2023, the World Bank has hinted that the product is still subsidized due to the price per liter Nigerians buy petrol. Former President Olusegun Obasanjo has also stated that fuel subsidy is back.
However, the Nigerian National Petroleum Company (NNPCL) has clarified that the firm only takes care of petrol importation shortfalls between the company and the federation. In recent times, NNPCL has increased fuel prices to N950 and N1,100 per liter, indicating the removal of products’ subsidy.
Aliko Dangote, the President of Dangote Group, has called on the Nigerian government to completely remove fuel subsidies. His comments come after Dangote Refinery’s petrol commenced distribution into the Nigerian market on September 15, 2024, through NNPCL.
While Dangote pushes for complete fuel subsidy removal, which will see fuel rise above N1,100 per liter, Nigerians continue to grapple with high energy costs. A recent report by Major The Major Energies Marketers Association of Nigeria (MEMAN) revealed that the landing cost of Petrol import dropped to N981.08 per liter in September 2024 from N1,130 in July.
The fuel subsidy controversy has far-reaching implications for the Nigerian economy and citizens. As the country grapples with the complexities of fuel pricing and subsidy removal, one thing is clear: the stakes are high, and the debate is far from over.
