Nigeria To Spend 1 Year Oil Revenue On Fuel Subsidy In 6 Months

Nigeria’s Finance Minister, Zainab Ahmed, has disclosed that the country’s fuel subsidy payment in six months will surpass the revenue earned from oil sources within 12 months.

Ahmed said this at the public presentation on Wednesday, where she broke down the budget details. The minister disclosed that fuel subsidy will be paid for till June 2022. 

This indicates that President Muhammadu Buhari’s administration intends to place the decision to end or continue payment for fuel subsidy in the hands of the next administration, which will come in by May 2023. 

According to the budget breakdown by Ahmed, Prime Business Africa learnt that Buhari’s administration has allocated N3.36 trillion for fuel subsidy payments in six months.

This is above the N2.29 trillion the Federal Government projected to earn as oil revenue in 12 Months of this year. It means the whole oil revenue earned in one year will be spent on subsidising fuel within six months. 

“in the 2023 framework we had assumed and the National Assembly had approved that the petroleum subsidy would remain up to the middle of 2023 based on the 18 months extension announced early in 2022 and in this regard 3.36 trillion has been provided for PMS subsidy,” Ahmed said. 

She added that the total revenue available to fund the 2023 FGN budget is estimated at N10.49 trillion, “Of this federal government oil revenue share is projected to be 2.29 trillion,” the minister said. 

Meanwhile, Prime Business Africa reported that Ahmed said the Federal Government has been borrowing money to fund fuel subsidy.

She advocated for the end of fuel subsidy regime, a statement that has also been echoed by Presidental candidate, Bola Tinubu, who said regardless of protest, he will remove it if elected. 

But the Trade Union Congress (TUC) of Nigeria has spoken against the removal of fuel subsidy, insisting that the country must start refining crude oil before taking such a decision.