Nigeria has spent N10 trillion on fuel subsidy - BudgIT
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Nigeria has spent N10 trillion on fuel subsidy - BudgIT

- BudgIT urged President Buhari-led administration to stop paying fuel subsidy

- The organisation said continued payment of fuel subsidy is to the detriment of Nigeria's development

-The civic organisation added that the 10 trillion consumed by the subsidy regime so far could have been used for infrastructural development

BudgIT, a civic organization that applies technology to intersect citizen engagement with institutional improvement, to facilitate societal change, has urged President Muhammadu Buhari to remove fuel subsidy.

The organisation said continued payment of fuel subsidy is to the detriment of Nigeria's development, Daily Trust reports.

Shakir Akorede, BudgIT's communications associate, said in a statement: “To the detriment of socio-economic developments, Nigeria has spent nothing less than N10 trillion on petrol import subsidy between 2006 and 2018."

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“The continuation of petrol price regulation perpetuates safety nests for exceptional forms of corruption within the country’s subsidy regime. Import subsidy creates petrol price arbitrage – the differential between the regulated price in Nigeria and the high petrol prices in neighbouring countries – which is big enough to incentivise smuggling of subsidized products to neighbouring border towns.

"According to NNPC, there are 2,201 petrol stations in Nigeria’s porous border towns and coastal frontiers, with a combined fuel tank capacity of 144.9 million litres. Analysts argue, ringing corruption alert, that the population around that area is far from justifying the size of the petrol market,” added the statement.

BudgIT also noted that “fuel subsidy” deprives Nigeria of funds needed for critical socio-economic development as it discourages investors, who generally prefer a deregulated industry, from investing in the downstream sector especially in the area of refinery construction and operation.

It added that the 10 trillion consumed by the subsidy regime is sufficient to construct 27,000MW of electricity or build about 2,400 units of 1000-bed standard hospitals across 774 local government areas of Nigeria.

Gabriel Okeowo, BudgIT’s principal lead said: “It’s high time fuel subsidy is removed. Efficient palliative measures should be provided for those that will be worse hit by the removal. Four sectors – Transportation, Power, Health and Education – should be prioritized to cushion the effects."

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Meanwhile, Legit.ng previously reported that the group managing director of the Nigerian National Petroleum Corporation (NNPC), Maikanti Baru, said that the under-recovery recorded on petrol has dropped to N20 per litre from over N80.

Under-recovery is the term used by NNPC to describe the financial amount of subsidy the federal government absorbs for keeping the pump price of petrol at N145 per litre.

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Source: Legit.ng

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