New insights have surfaced regarding the Nigerian government’s handling of petrol subsidies under President Bola Tinubu, revealing that payments are still being made despite prior claims to the contrary.
A recent report from a Premium Motor Spirit (PMS) pricing framework indicates that the government subsidizes fuel at an average rate of N501.47 per litre across at least eight major cities in Nigeria.
This revelation follows President Tinubu’s announcement in May 2023, which proclaimed the end of fuel subsidies, resulting in a spike in fuel prices and financial strain for many citizens.
Contrary to the government’s assertions, the new findings show that subsidies are indeed being disbursed, with Lagos State receiving N499.24 per litre, while Abuja gets N488.04 per litre, alongside similar figures in other urban areas.
The subsidies are determined by the disparity between the indicative pump price and the actual retail price, with the government covering the difference to keep consumer prices manageable.
Notably, the government’s previous denials about subsidy payments have been contradicted by several sources, including former Kaduna State Governor Nasir El-Rufai and the International Monetary Fund (IMF). The IMF recently reported that the Nigerian government reinstated petrol subsidies towards the end of the previous year.
According to the IMF, the subsidy payments are projected to consume nearly half of Nigeria’s anticipated oil revenue for the year, amounting to an alarming N8.43 trillion.
In the meantime, the Nigerian National Petroleum Company (NNPC) Ltd faces challenges in sustaining petrol subsidy payments, with indications that the rising subsidy expenses may jeopardize its ability to continue importing fuel.
