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Tinubu’s petrol subsidy gulps N15trn as scarcity worsens

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2 years ago

August 21, 2024

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President Bola Tinubu’s administration has spent N15.096 trillion on petrol subsidy in the last 14 months, according to BusinessDay’s calculations.

The value of the subsidy expenditure under Tinubu was obtained from the National Bureau of Statistics (NBS) data and information from petroleum marketers.

According to the NBS, Nigeria imports between 1.4 billion litres and 2.5 billion litres per month, indicating an average of 1.95 billion litres per month. In 14 months (June 2023-July 2024), the country has consumed 27.3 billion litres.

On the other hand, independent marketers say the landing cost of petrol and other logistics costs stand at N1,203 per litre. The NNPC Retail sells petrol at N650 per litre at its stations, leading to a differential of N553 for each litre of petrol.

With the N553 differential and 27.3 billion litres consumed in 14 months, the amount likely to have been spent over the period by the Tinubu administration is N15.097 trillion.

Kelvin Ayebaefie Emmanuel, CEO of Dairy Hills, said Nigeria must first of all be honest with the number of litres of petrol consumed in the country.

“The first step to address the cost of under-recovery on the premium motor spirit (PMS) subsidy is finding the actual daily consumption.

“The other two major factors that have gone into the re-introduction of under-recovery is the price of crude oil and the exchange rate. The only way to achieve non-payment is to have the Naira to USD pair at 750 and Brent prices at $75 per barrel,” he said.

“This is the reason why the government needs to adjust the domestic crude oil supply obligations and guarantee domestic refineries the feedstock they require to backwardly integrate production.”

President Bola Tinubu in his inauguration speech on May 29, 2023, said petrol subsidy was gone. However, it has grown bigger than the amount being paid before he came to power.

Nigeria’s former President Muhammadu Buhari spent N10.7 trillion on petrol subsidies between 2016 and the first six months of 2023.

In one year, however, Tinubu’s petrol subsidy expenditure has eclipsed that. Analysts attribute this to the naira slump after the foreign exchange liberalisation in 2023.

Naira has lost more than 60 percent value since it was liberalised by the current administration, analysts say. A dollar exchanges for N1,592.06 on Tuesday as against N740 on June1, 2023.

A week before the 2023 presidential election, which led to the new administration, Mele Kyari, group CEO of Nigerian National Petroleum Company (NNPC) Limited, revealed that the country was spending more than N400 billion monthly on fuel subsidies.

But on Monday, in a viral video, Kyari told the press that the state-owned company was not paying fuel subsidies.

“I told you there is no subsidy whatsoever. We are recovering our full costs from the products that we import.

“We understand why the marketers are unable to import. We hope that they do this very quickly and these are some of the interventions the government is doing. There is no subsidy,” he said.

BusinessDay’s analysis, however, has revealed that while the retail price of petrol stands between N650 and N750 across the country, the landing cost of petrol per litre is over N1,200 as of Monday, August 19, 2024.

“The government has seen the analysis and has now recognised the subsidy is back and bigger,” said Jide Pratt, chief operating officer of AIONA and Country Manager of TradeGrid.

Pratt said that the subsidy levels before Tinubu’s government were circa N50/N60 naira per litre using the gasoline index and the exchange rate.

He said: “A few months ago it was in the N200 per litre range. The exchange rate has been all over the place and this affects the landing cost of the sole importer of PMS, which is the NNPC.

“It was hard to justify how NNPC Retail had an N42 price advantage over other marketers who buy from her. It was very odd to justify in a petroleum market with slim margins.

“But I guess the chicken has come home to roost. The queues we keep witnessing albeit now longer and more frequent are a testament to maybe struggles with payment as and when due.”

According to a recent report by The Cable, President Bola Tinubu has approved a request by the NNPC Ltd to utilise the 2023 final dividends due the federation to pay for petrol subsidy.

The report showed that the president also approved the suspension of the payment of 2024 interim dividends to the federation in order to augment NNPC’s cash flow, according to presidency sources.

In addition, the national oil company told the president it will be unable to remit taxes and royalties to the federation account for now because of the subsidy payments, which it termed ‘subsidy shortfall/FX differential’.

Despite the Petroleum Industry Act of 2021 and the deregulation of the downstream sector, which permits licensed private oil marketers to import petrol, the state-owned oil company remains the only importer in Nigeria.

However, private marketers have struggled to access the foreign currency needed for petrol imports, forcing them to rely on the state-owned oil company for supply.

Over 90 licensed petroleum marketers in Nigeria have been unable to import products due to unresolved price differences, leaving them inactive nearly nine months after President Bola Tinubu announced the deregulation of the downstream petroleum sector.

“If you look at the price of international crude, and you compare the refined products across Africa, how much is the landing price? Right now, every refined product you have is imported,” said Pedro Omontuemhen, partner & Africa oil and gas leader, PwC Nigeria.

“When you compare the international price, landing price, and the state of price (in the country), that means the difference is being borne by the government, either directly or through some of the government agents.”

According to Omontuemhen, it doesn’t matter what the government is saying as the reality of things in the country continues to show that someone is paying for the subsidy.

“One thing we should be aware of is that there are subsidies everywhere in the world. Another name for subsidy is a grant. They are all over the world.”

Negative impact on government revenue

Petrol scarcity has worsened across the country, with a litre selling at N900 and N1,000 at some filling stations in Lagos, Abuja, Port Harcourt, Kano and other parts of Nigeria. Petrol stations selling at N650-N750 often have long queues.

Muda Yusuf, chief executive officer of Centre for Promotion of Private Enterprise, said the current economic situation has necessitated the open acceptance of the subsidy payment, noting that the petrol product is already being subsidised.

“Obviously, this affects government revenues because remittances from NNPC is one of the major sources of revenue for the government. If that is removed, we will be left with just revenues from taxes and forex gains. And when you talk about the tax revenues, a lot of it has been taken off by tax credits being offered to some companies.”

Yusuf said that the current price of fuel, which ranges from N617 to N1,000 across the country, is already being subsidised by the government.

He explained that the prices of fuel may remain high until Nigeria stops the importation of petroleum products.

“It is a dilemma for the government also as they are in a tight corner. Look at the recent nationwide protest, which was because of the sufferings occasioned by fuel subsidy removal.

“With the exchange rate, the amount we currently pay for fuel has a huge subsidy component – just that the government is not open to us. Until we stop fuel importation, we may not get any relief from the high price of petrol,” he further said.

Ken Ife, lead consultant on private sector development to the ECOWAS Commission, said that the government has always subsidised the price of petrol, which is why it could be sold for less than N1,200 per litre.

“The price of petrol should be at about N1,200, but we still get to buy at N600 plus, which means somebody is paying for subsidy somehow and I do not see the price of per litre dropping anytime soon.

“And if the price must drop, then some things must be done and they include ensuring that Dangote receives sufficient crude and it is allowed to pay in Naira. Also, the NNPC must also buy refined crude from Dangote.

“Another issue of concern is that the NNPC has almost securitised all of its crude. So, we do not know how much it has left, but it is important we ensure that Dangote Refinery gets sufficient crude in naira. Also, if the NNPC continues to import refined petrol with all the cost payable in dollars, this may cause the price of PMS to remain high,” he added.

News

2025 Capital Budget Gets New Lease of Life as Reps Push Deadline to September

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55 seconds ago

June 15, 2026

Gloria Ikibah

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By Gloria Ikibah

The House of Representatives on Monday convened an emergency sitting and expedited the passage of a bill tp extend the implementation period of the capital component of the 2025 Appropriation Act from June 30 to September 30, 2026.

The bill, titled “A Bill for an Act to Amend the Appropriation (Repeal and Enactment) Act, 2025 to Extend the Implementation of the Capital Aspect of the Appropriation Act, 2025 from 30 June 2026 to 30 September 2026 and for Related Matters,” received speedy passage as it through
scaled first, second and third readings in a single sitting following the suspension of the relevant rules of the House Standing Orders.

Leading debate on the general principle of the bill, House Leader, Rep. Julius Ihonvbere, said the extension was necessary as several capital projects captured in the 2025 budget had not been fully implemented.

He emphasised that the amendment was not intended to alter any provision of the budget but merely to extend its lifespan by three months to allow ongoing projects to be completed.

He said: “It is very straightforward. Because some aspects of the capital appropriation will not be fully implemented, if we do not extend the life of this particular law, it will have a very grave impact on the growth and development of the national economy.

“The purpose essentially is to extend the lifespan. We are not touching any part of the law. It is simply extending the lifespan from June 30, 2026 to September 30, 2026. I urge my colleagues to approve this so that we can continue with the work of developing and growing our economy and country”.

Presiding over the session, Speaker of the House, Rep. Abbas Tajudeen, acknowledged that the records provided by the Chairman House Committee on Appropriations and other relevant agencies revealed that implementation of the capital budget was yet to be completed.

“As you are aware, the 2025 budget was extended to June 30. From the records we received from the Chairman, Appropriations, and other relevant quarters, it is yet to be fully implemented. It is therefore in the best interest of this country and the National Assembly for us to extend the budget to September 30 to enable the Federal Government fulfil its obligations under the 2025 budget,” the Speaker said.

Following the adoption of the bill at second reading, the House dissolved into the Committee of Supply where it had the clause by clause consideration of the bill, and approved the three clauses, explanatory memorandum and long title of the bill.

The committee subsequently reported back to plenary, where lawmakers adopted its recommendations and suspended House rules to allow the bill to be read a third time and passed the same day.

With the passage of the amendment, federal ministries, departments and agencies now have an additional three months to implement capital projects and utilize funds appropriated under the 2025 budget.

Meanwhile, the House also announced changes in the leadership of some standing committees.

The appointments are as follows:
• Rep. Ali Madaki – Chairman House Committee on Special Duties
• Rep. Ali Isa J.C. – Chairman House Committee on Shipping Services,
• Rep. Pascal Agbodike – Chairman House Committee on Small and Medium Enterprises Development Agency of Nigeria (SMEDAN),
• Rep. Kelechi Nwogu – Chairman House Committee on Hydrological Services

The Speaker urged the newly appointed committee chairmen to assume their responsibilities immediately and bring their legislative experience to bear in advancing the work of the House.

News

Day 4 of projects commissioning as President TInubu set to commission newly constructed Court of Appeal Building

Published

4 hours ago

June 15, 2026

Austin Ojomah

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President Tinubu will commission the newly constructed Court of Appeal (Abuja Division) Building today, 15/6/26 as FCT projects commissioning enters Day 4.

#FCTProjects2026
#RenewedHopeFCT

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Cholera Outbreak: Plateau Records 5 Deaths, 11 Confirmed Cases

Published

6 hours ago

June 15, 2026

Admin

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Plateau State commissioner for Health, Dr Nicholas Baamlong, has revealed that the state recorded 11 confirmed cases of cholera, five deaths and 53 suspected cases.

Baamlong, who disclosed this to journalists yesterday in Jos, said the confirmed and suspected cases were reported in Pushit, Mangu 1 and Mangu 2 communities in Mangu local government area (LGA).

According to him, the state Ministry of Health is intensifying public health interventions to contain the outbreak, prevent further spread and reduce its impact on affected communities.

He explained that the state had taken decisive actions to control the outbreak and protect its citizens via the deployment of additional Response Teams (RRTs) to the affected wards, scaling up of treatment centres and isolation capacity and the emergency procurement of Rapid Diagnostic Tests Kits, intravenous fluids and essential drugs.

The Commissioner further said that the ministry had activated an Incident Management System (IMS), for a comprehensive and multi sectorial response to the outbreak.

“The activation of the IMS ensures a coordinated, efficient, and accountable response structure in line with national and international emergency response frameworks,” he said.

Baamlong explained that cholera was an acute diarrhoeal disease caused by consuming food or water contaminated with the bacterium Vibrio cholerae.

He urged residents of Mangu LGA and neighbouring communities to remain vigilant and take preventive measures, including drinking safe water, maintaining proper hand hygiene, avoiding open defecation, and ensuring proper waste disposal.

He also advised residents to promply report suspected cases of cholera to the nearest healthcare facility for immediate attention.

While reaffirming the state government’s commitment to safeguarding the health and well-being of residents, Baamlong called on development partners and other stakeholders to support ongoing response efforts.(NAN)