Nigeria Spends N18.39bn Daily On Petrol Subsidy – Finance Minister, Zainab Ahmed

The Minister of Finance, Budget and National Planning, Zainab Ahmed has revealed that Nigeria spends N18.39 billion daily on petrol subsidy petrol payments.

Zainab Ahmed Grilled

The minister disclosed this during an investigative hearing of the House ad hoc committee which is investigating the petroleum subsidy regime between 2013 to 2022.

Zainab, who was grilled over funding of subsidy payments by the federal government, said that Nigeria spends N283 per litre of PMS or N18.397bn per day as subsidy.

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.”

KanyiDaily recalls that Ahmed Zainab had recently revealed that it will make provision to spend N6.72 trillion on petrol subsidy payments in 2023.