One year after President Bola Ahmed Tinubu sensationally declared that the era of paying oil subsidies was over, the federal government yesterday admitted that it would be spending up to N5.4 trillion on oil subsidies in 2024.
The president made that declaration during his presidential inaugural speech on May 29, 2023.
With that, the price of petrol rose steeply from N194 a litre to over N600 due to market forces.
However, the price had stabilised at the present cost despite fluctuations in the international price of crude, leading many to conclude that the government must be paying some subsidy on the product.
For several months, government officials had repeatedly denied this fact, insisting that there were no more subsidy payments.
The revelation came during a presentation by Wale Edun, the minister of finance and coordinating minister of the economy, in an Accelerated Stabilisation and Advancement Plan (ASAP), designed to address key challenges affecting the reform initiatives and stimulate development in various sectors of the economy.
“At current rates, expenditure on fuel subsidy is projected to reach N5.4 trillion by the end of 2024. This compares unfavourably with N3.6 trillion in 2023 and N2.0 trillion in 2022,” a draft copy of the ASAP presented by Edun said.
The federal government had previously maintained that it would no longer subsidise fuel costs, instead opting for a deregulation policy.
“As far as I’m concerned, the President removed the subsidy and it remains removed till today. Anybody who is saying that subsidy is being paid, it is left for the person to bring the facts and then we will talk about them,” Heineken Lokpobiri, minister of state for petroleum resources (Oil), said in April. The draft copy of the ASAP presented to the president was accompanied by an Executive Order to bolster the plan.
It revealed that the federal government is still supporting downstream consumption.
