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Years After Buhari Called Petrol Subsidy 'Fraud', His Government Says Fuel Subsidy Costs Nigeria N18.39Billion Daily

Years After Buhari Called Petrol Subsidy 'Fraud', His Government Says Fuel Subsidy Costs Nigeria N18.39Billion Daily
August 19, 2022

The data, according to her, indicated that the expected average daily truck out is 64.96 million litres of petroleum.

The expected daily payment for fuel subsidy in Nigeria, according to finance minister Zainab Ahmed, is N18.39 billion.

She made this statement during a session of the House ad hoc committee, which is looking into the regime of petroleum subsidies from 2017 to 2021.

She said, “The total amount of subsidy per day is N18.397 billion per day,” she said. “So, if you are projecting for the full year, it would be N6.715 trillion. If you are projecting for half a year, it would be 50 percent of that.”

The minister claimed the Nigerian National Petroleum Company (NNPC) and the regulator's information were used to compute the amount.

The data, according to her, indicated that the expected average daily truck out is 64.96 million litres of petroleum.

She added that independent oil marketers received a subsidy of N1.774 trillion over a four-year period.

Meanwhile, 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 subsidies, calling it a fraudulent policy.

Buhari had vehemently contended that there was no fuel subsidy in an interview, claiming that the economic strategy had given the previous administration a way to grease the wheels of corruption.

If elected, he also pledged to end fuel subsidies and further lower the price of petrol or Premium Motor Spirit at the pump.

“Who is subsidising who?” he queried while explaining why subsidy payment is 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 how 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.

With fuel subsidy, a fraction of the price that consumers are supposed to pay for the product is paid by the government so as to ease the price burden. 

After hearing findings from the financial committees, the lower and upper legislative chambers supported the president's request.

In 2021, petrol subsidy payments gulped N1.43 trillion.