Nigeria May Overshoot N4trn 2022 Petrol Subsidy Budget–Analyst

With the federal government spending over $1 billion on fuel subsidy payment in August alone, analysts have expressed concerns that the country may overshoot the N4 trillion budgeted for fuel subsidy payment this year.

The chief executive officer of the Centre for the Promotion of Private Enterprises(CPPE), Dr. Muda Yusuf, warned that at this rate the nation is close to spending about N5 trillion in petrol subsidy payment before end of the year.

The Nigerian National Petroleum Company Limited(NNPCL), just disclosed that the federal government spent about $1.22 billion or N525.714 billion in payment of subsidies in August, bringing the total spent this year to N2.568 trillion.

In an interview with LEADERSHIP, he recalled predicting that federal government might spend up to that figure going by level of consumption and foreign exchange disparity as the nation imports most of its white products.

The rising costs of sustaining subsidy regime in Nigeria is reportedly straining the budget and draining revenue from the NNPC.

In April, the National Assembly approved a N4trillion petrol subsidy for this year after the government in January reversed a pledge to end its subsidies to avert protests in the run-up to presidential elections in February 2023.

The NNPCL has not submitted any money to the federal government this year due largely to subsidy costs.

August’s bill compared with N448.782 billion in July, according to a document NNPC submitted on Friday to the Federation Account Allocation Committee.