A government report shows the Nigerian National Petroleum Company Limited or the NNPC has spent N1.03tn on subsiding Premium Motor Spirit, or petrol, between January and October of this year.
The report also mentions the said company’s plan to deduct N199bn of subsidy in December this year, all amid plans on removing subsidy on petroleum products next year by the Federal Government, as reported by PUNCH.
The presentation on the report was aimed at the NNPC’s September 2021 crude oil, gas sales and proceeds garnered in October 2021.
To date, the NNPC has remained the sole importer of petrol into the country, due to other marketers’ inability to import the commodity and access the US dollar.
However, the decision to deduct remittances to FAAC has raised concerns, especially among state governors. One of them is the governor of Kaduna State, Nasir El-Rufai, who criticized the high cost of fuel subsidies as ‘unreasonable’.
“This is why the Nigerian Governors’ Forum met and agreed to support the Federal Government’s social compact. Withdraw this subsidy by February,” said El-Rufai.
Meanwhile, operators in the downstream oil sector and economic experts warned the government to be cautious upon withdrawing the subsidy. It is necessary to consider the significant impact the removal of subsidies has on other commodities, which may lead to a worse standard of living.
A renowned economist and Chief Executive Officer, Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said the decision might pose a serious challenge to the government, if not handled correctly. As of now, citizens and elites alike are against subsidy removal.