- The Federal government says the amount spent on fuel subsidy is affecting its development programme
- Minister of Finance, Zainab Ahmed noted that the the deductions so far have become the biggest factor contributing to the dwindling allocations to government accounts
- World Bank has also condemned the payment on petrol subsidy, which it said is on track to gobble up N2.9tn this year
Nigeria has been likened to a malnourished individual needing urgent treatment over continuous funding of fuel subsidy.
The analogy was made by World Bank Country Director for Nigeria, Shubham Chaudhuri as he also expressed surprise that Nigeria is spending so much on fuel subsidy amid scarce revenue.
Chaudhuri spoke at a panel discussion on the ongoing 27th National Economic Summit in Abuja
According to report from Punch, Chaudhuri called for some critical decisions to be made now for the country to realise its potential and projected that by December, the money on petrol subsidy would have gobble up N2.9 trillion this year.
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“I think the urgency of doing something now is because the time is going in terms of retaining the hope of young Nigerians in the future and potential of Nigeria. The kinds of things that could be done right away – the petrol subsidy; yes, I hear that six months from now, perhaps with the PIA(Petroleum Industry Act) coming into effect, this will go away.
“But the fact is can Nigeria even afford to wait for those six months? And there is a choice: N3tn to PMS subsidy which is depriving states of much-needed revenues to invest in basic services.”
Also speaking during the panel discussion, the Minister of Finance, Budget and National Planning, Zainab Ahmed has lamented the increasing pressure on Nigeria’s revenue due to daily fuel subsidy payment.
She stated that actions are being taken to stop the payment, which is why there is no provision for payment of subsidies after the first six months of 2022.
“In our 2022 budget, we only factored in subsidy for the first half of the year; the second half of the year, we are looking at complete deregulation of the sector, saving foreign exchange and potentially earning more from the oil and gas industry.
“We are very uncomfortable at the fact that we have borrowed at the quantum exceeding the threshold that is outlined by the Fiscal Responsibility Act, and must plug all holes to save what we have.”
NNPC: Report Reveals Billions of Naira Petrol Subsidy Gulped in 7 Months
Legit.ng had earlier reported that petrol subsidy payments gulped N714 billion in the last seven months, shrinking monthly revenue accrued to the federation account.
The report explained that the subsidy or under-recovery is the underpriced sales of premium motor spirit (PMS), better known as petrol.
The report also provided a month on month breakdown of all the payments made to oil marketers from January to September.