NNPC spends $10bn on fuel subsidy in 2022

NNPC Towers, Abuja

Abuja -- The Nigeria National Petroleum Company, NNPC, spent 4.39 trillion naira ($9.7 billion) on petrol subsidy last year, latest data from the state-owned firm showed.

The government has blamed this for dwindling public finances.

Africa's biggest economy spent 2.91 trillion naira ($7 billion) on petrol subsidy between January and September 2022, according to the NNPC, in an earlier data released late last year.

NNPC did not remit funds to federal accounts last year, its data showed, leaving a hole in public finances at a time when the government has been warning that low revenues and large deficits left it unable to stimulate the economy.

SucceKsysiavrei governments in

Nigeria have tried and failed to remove or cut the subsidy, a politically sensitive issue in the country of 200 million people.

Nigeria imports nearly all its refined fuels because local refineries were shut due to years of neglect.

Oil production, which has started to recover, has been throttled by crude theft and pipeline vandalism, which means Nigeria is spending more on fuel imports than it is getting from crude oil production.

Finance minister Zainab Ahmed has said the country will keep its costly but popular petrol subsidy until midthis year and set aside 3.36 trillion naira ($7.5 billion), in this year’s national budget, to spend on it.

"Petrol subsidy will remain up to mid-2023 based on the 18-month extension announced early 2022," Ahmed said. President Muhammadu Buhari signed the 2023 budget of 21.83 trillion naira ($49 billion) into law after lawmakers increased the size by 6.4% and raised the oil price assumption.

The government of President Buhari said subsidy will go in June, but it is uncertain what will happen as the country expects a new regime at the helm of its affairs as from May 29, following next month's presidential election.