Minister of Finance and Coordinating Minister of the Economy Wale Edun has admitted that the federal government spent more money secretly subsidising petrol for Nigerians in 2023 despite President Bola Tinubu’s announcement of scrapping the subsidies at his inauguration last year.
The removal of the fuel subsidy jerked prices from N190 per litre to N580 per litre, and often more, depending on the naira’s value in the foreign exchange market.
Mr Edun conceded the subsidy payment in a draft report of the Accelerated Stabilisation and Advancement Plan (ASAP), which was submitted to Mr Tinubu on Tuesday.
He projected that the fuel subsidy would reach N5.4 trillion by the end of 2024, which contrasts sharply with the N3.6 trillion budgeted for it in 2023 and 2022’s N2 trillion.
“At current rates, expenditure on fuel subsidy is projected to reach N5.4 trillion by the end of 2024. This compares unfavourably with N3.6 trillion in 2023 and N2.0 trillion in 2022,” stated the draft ASAP report.
The report came on the back of repeated denials by Mele Kyari, group CEO of Nigeria’s energy regulator, NNPC, that there were no provisions whatsoever to accommodate fuel subsidy payment in the 2023 budget.
“I told you there’s no subsidy whatsoever. We are recovering our full cost from the products that we import,” Mr Kyari said in August 2023 to squelch rumours that the government was partially funding subsidies.
“We sell to the market; we understand why the marketers are unable to import. We hope they do this quickly, and these are some interventions the government is making. There is no subsidy,” the NNPC boss said.
However, Nigerians’ effect of the subsidy payment remains unfelt, as they still pay between N600 and N680 per litre to buy fuel. This has caused a drastic decline in the revenues of small businesses and multinational companies.
Companies like Microsoft and UK pharmaceutical giant GlaxoSmithKline have already shut down their businesses in Nigeria due to the harsh economic environment.
Inflation, at 40 per cent, was at a never-before-seen peak, causing some of the president’s supporters to openly rebuke him and question the achievement of his policies since assuming office over a year ago.
On Monday, the Nigeria Labour Congress and Trade Union Congress declared a nationwide strike over the removal of subsidies and consequently rising food prices, which were not met with an increase in the minimum wage.
The strike was relaxed for five days after the federal government lobbied the organised labour and assured them Mr Tinubu was committed to increasing the minimum wage to above N60,000.
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