Data from the Nigerian National Petroleum Company Limited and the Nigeria Extractive Industries Transparency Initiative, obtained by The PUNCH shows that President Buhari’s administration had ready spent about N6.88tn to subsidise the commodity.
President Muhammadu Buhari’s government could spend up to N10.976 trillion to subsidise Premium Motor Spirit (PMS), otherwise known as petrol in its eight years – from May 2015 to May 2023.
Data from the Nigerian National Petroleum Company Limited and the Nigeria Extractive Industries Transparency Initiative, obtained by The PUNCH shows that President Buhari’s administration had ready spent about N6.88tn to subsidise the commodity.
SaharaReporters had reported that when he ran for president in 2011, President Muhammadu Buhari who doubles as the Minister of Petroleum Resources, criticised former President Goodluck Jonathan's proposal to end fuel subsidy, calling it a fraudulent policy.
In an interview, Buhari vehemently contended that there was no fuel subsidy, claiming that the economic strategy had given the previous administration a way to grease the wheels of corruption.
He also pledged that if elected, he would end fuel subsidy and further lower the price of petrol or Premium Motor Spirit at the pump.
“Who is subsidising who?” he queried while explaining why he thought subsidy payment was a fraud.
"If anybody told me about subsidy, he is a fraud. There is so much fraud I don’t want to talk about, but the day I have to talk about it, I will invite a petroleum economist to come and tell me who is subsidising Nigerians,” he fumed.
Buhari further argued that during his time as a petroleum minister, from 1976-78, there was no mention of subsidy payment.
“What I understand that Nigeria should charge Nigerians is the cost of one barrel at the wellhead and then the cost of transportation to the refinery, the cost of refining it and its cost at the pump.”
Based on his economics, he concluded: “If anybody says he is subsidising anything, he is a fraud."
Fast forward to 2022, and seven years into Buhari’s government, the National Assembly approved the request of the President to earmark N4 trillion for petrol subsidy in 2022.
However, NEITI stated in a report submitted last month to the House of Representatives ad hoc committee investigating the fuel subsidy regime from 2013 to 2022, that petrol was subsidised all through these years, The PUNCH reports.
Figures from the report showed that fuel subsidy gulped N316.7bn in 2015; N99bn in 2016; N141.63bn in 2017; N722.3bn in 2018; N578.07bn in 2019; and N134bn in 2020.
Although the NEITI report did not state the amount spent in 2021 and 2022, figures obtained from NNPC indicated that fuel subsidy jumped to N1.43tn in 2021.
NNPC data also showed that the petrol subsidy gulped N2.565tn between January and August this year. The oil company, however, described its subsidy spending as under-recovery.
NNPC said its under-recovery of PMS/value shortfall, otherwise called fuel subsidy, was N210.38bn, N219.78bn, N245.77bn and N271.59bn in January, February, March and April 2022 respectively.
In the months of May, June and July, the petrol subsidy gulped N327.07bn, N319.18bn and N448.78bn respectively. In August this year, the subsidy gulped N525.71bn. The total sum spent on PMS subsidy during the eight months was put at N2.565tn.
The paper reports that the amount spent on subsidy in September 2022 has not been released yet by NNPC as well as what the company could spend in the remaining three months in 2022.
The reports that going by the global cost of crude oil and the volume of petrol consumed in Nigeria since January, which are the major factors that drive subsidy, the oil company might still spend over N200bn monthly on subsidy.
The least amount that it spent on subsidy in the eight-month period so far captured in 2022 was N210.38bn. This implies that should crude oil prices continue to fluctuate between $90 and $100/barrel, the company’s monthly subsidy spending would not go below N200bn.
Hence, the company would spend not less than N800bn as a subsidy on petrol from September to December 2022.
In the Medium Term Expenditure Framework, the Nigerian Government proposed to spend N3.3tn on fuel subsidy between January and June 2023.
Recall that the Minister of Finance, Budget and National Planning, Zainab Ahmed, had told members of the House of Representatives that the government’s projection was to spend N6.72tn on subsidy in 2023.
She, however, said the second option of the government was to keep subsidy till June 2023 and that in this option, fuel subsidy was projected to gulp N3.3tn.
A combination of all the above figures indicated that the Buhari regime could spend nothing less than N10.976tn on petrol subsidy from 2015 and June 2023.
Regrettably, the federal government approved $2.9bn (N1.26tn at the official rate of N436/$) for the rehabilitation of Nigeria’s dormant refineries.
The NNPC in 2021 said it spent N100bn on refineries’ rehabilitation. It did not name the refineries in its report that was submitted to the Federation Accounts Allocation Committee.
Between January and August this year, the oil company again said it spent N54.66bn on the rehabilitation of refineries. Again, no refinery was mentioned by the oil firm.
During electioneering in 2015, APC promised to fix the country’s refineries but Buhari only has about seven months left to fulfil the promise as his tenure ends in May 2023.