An investigation has revealed that the present administration paid N169.4 billion as fuel subsidy in August to keep at N620 per litre the pump price of Premium Motor Spirit (PMS), popularly known as petrol.
TheNewsGuru.com (TNG) recalls President Bola Tinubu announcing the removal of subsidy on petrol on May 29 when he took his oath of office as the 16th president of Nigeria, saying there was no allocation for it in the 2023 budget beyond July.
Following Tinubu’s announcement, the Nigeria National Petroleum Company Limited (NNPCL) announced the adjustment of pump price where NNPCL filling stations were selling fuel at N537 while others were selling from N540 and above.
According to official statistics, the Federal Government spent about N10 trillion on fuel subsidies between 2006 and 2018, and N5.82 trillion between 2021 and 2022 while it gulped N3.36 trillion from January to June 2023.
Petrol now sells at over N600 per litre in the country and the administration said it had saved much money from the removal of subsidy, part of which was already been sent to States as palliatives.
However, according to Daily Trust’s finding, the federal government paid N169.4 billion as subsidy in August to keep the pump price at N620 per litre.
“If that payment was not approved, the country would have been thrown into serious crises because it was clear that the public could not bear in further depreciation in pump price, so something had to give.”
“Everything has been done to not offset the market balance until we are able to resolve the production with Dangote refinery as well as the loans, once this is settled, we should see some stability,” a source told Daily Trust.
According to the report, a document by the Federal Account Allocation Committee (FAAC) showed that in August 2023, the Nigerian Liquefied Natural Gas (NLNG) paid $275m as dividends to Nigeria via NNPC Limited.
“NNPC Limited used $220m (N169.4 billion at N770/$) out of the $275m to pay for the PMS subsidy. Then NNPC held back $55m, illegally,” the report reads.
The revelation by FAAC effectively indicates that the subsidy is back and NNPC is now taking NLNG dividends to pay the subsidy.