The administrations of former President Muhammadu Buhari in the final five months of his term in 2023 and President Bola Tinubu have collectively spent N9.31 trillion on petrol subsidies in 19 months.

Data from Agora Policy, supported by sources such as FAAC communiqués, NEITI reports, and NNPCL’s 2023 AFS, have revealed that Nigeria spent N5.10 trillion on petrol subsidies in 2023, with an additional N4.21 trillion allocated in the first seven months of 2024.

Further analysis from Agora Policy indicates that Nigeria’s total petrol subsidy expenditure reached N8.15 trillion between 2006 and 2021 and N20.37 trillion over 18 years and seven months. In 2022 alone, the government paid N2.911 trillion to subsidise petrol.

In his inaugural speech on May 29, 2023, President Bola Tinubu announced the end of the petrol subsidy. However, the amount spent on subsidies since then has exceeded previous figures. Analysts attributed this increase to the devaluation of the naira following the liberalisation of foreign exchange in 2023.

Since the naira‘s liberalisation, its value has plummeted by over 60%, with the exchange rate soaring to N1,592.06 per dollar this week, compared to N740 on June 1, 2023.

The analysis has shown that Nigeria‘s subsidy percentage of GDP rose to 2.2% in 2023 despite the supposed elimination of the subsidy mid-year. This percentage was only higher in 2011, a year seen as a tipping point.

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Agora Policy’s analysis of Nigeria’s subsidy as a percentage of GDP from 2006 to 2023 shows the following: 0.7% (2006), 0.7% (2007), 0.9% (2008), 0.5% (2009), 0.7% (2010), 3% (2011), 1% (2012), 0.6% (2013), 0.5% (2014), 0.3% (2015), 0.1% (2016), 0.1% (2017), 0.6% (2018), 0.4% (2019), 0.1% (2020), 0.7% (2021), 1.5% (2022), and 2.2% (2023).

A recent report revealed that President Bola Tinubu has approved the NNPCL’s request to use the 2023 final dividends owed to the federation to fund the petrol subsidy. The report also indicated that the president approved suspending the 2024 interim dividend payments to the federation to bolster NNPC’s cash flow.

According to an NNPCL forecast, the cumulative petrol subsidy bill from August 2023 will reach N6.884 trillion by December 2024. According to analysts, President Tinubu’s announcement of removing the fuel subsidy in May 2023 initially saved the government N400 billion by June. However, NNPC‘s Group CEO Mele Kyari noted that the savings were short-lived due to the naira’s devaluation, which led to a month-on-month increase in the NAFEX exchange rate.

In August 2023, NNPC’s fuel importation costs shifted from surplus to negative, incurring a subsidy bill of N52.73 billion. After fluctuating for months, the bill surged to N833.68 billion in April. In June 2024, NNPC raised concerns with President Tinubu, stating that the subsidy payments severely impacted its cash flow, jeopardising its status as a “going concern.”

NNPC also warned that it might be unable to sustain petrol imports due to the mounting subsidy bill, which it attributed to “forex pressure.” Although the bill dropped slightly to N537.66 billion in December, it reached a new high of N693.67 billion in January 2024.

https://leadership.ng/nigerias-n9-2trn-19-month-petrol-subsidy-surpasses-n8-15trn-spent-in-16-years/

God no go forgive una

I believe it’s an impeachable offence to spend public funds without appropriation


I don't get how the government who said they removed subsidy and more than trippled fuel retail prices have ended up paying more subsidy than governments who actually did pay subsidy.

Tinubu is a weapon fashioned against Nigeria.

What do you expect? The government under Tinubu devalued the naira twice.

COMRADES, Tinubu is not a good leader at all, he lacks leadership skills

Same fuel subsidy issue both of them have shamelessly lied to this nation that they have done away with but yet have been amassing billion paying same despite the unavailability of petroleum products and lack of adequate stats on daily crude oil consumption in Nigeria. Tinubu and Buhari really dealt with Nigeria

Buhari really destroyed things for us.

misransome:
Buhari really destroyed things for us.

Which Buhari?

Seems you're not okay

Mm

Paraman:
What do you expect? The government under Tinubu devalued the naira twice.

And people like you supported him to do it...

Back to the topic:

We warned them about Tinubu, we warned about the way and manner he removed subsidy, we warned about how he floated the naira...

We were called haters for speaking the truth...

Tinubu must start where Buhari stopped. Una never see something

Una president dey try

TemplarLandry:
Another joyful news {rumor} for HoeBee AKA Mr. Gbajue.

His bootlickers, come and rejoice too.

You really need to realize that there is a large economic cost to keeping subsidy in NIgeria.

Instead, you are here playing politics.

It is obvious your party made a mistake keeping subsidy. See the result. 9 TRILLION Lost for nothing. And the money has to be replaced by loans....which means more deficit and more debt.

Your party has failed man, and your laughter is begining to wear thin.

Paraman:
What do you expect? The government under Tinubu devalued the naira twice.

It is a mistaken assumption that devaluing the haira has anything to do with subsidy. At best it would have made the cost of petrol go up to N1500 per liter or more.

But as you know, your beloved Tinubu essentially recommenced subsidy in October 2023, and thus, we lost even more money...alongside the money we lost from buhari under subsidy.

At the end, that 9trillion leaves a huge deficit in our budgeting, which has to be filled with loans.

I don't like GEJ, but looks like you guys goofed when your masters led out you people to disrupt subsidy removal in 2012, which would have been the last time we could have done this painlessly.

Karma is always a harsh mistriess.

There's no more subsidy again. If there's subsidy today then NNPC would not have been able to make trillions in profits and pay dividends! Bring in your petrol and sell at any price. FG will not pay you any subsidy if you choose to do giveaway.
May God bless Nigeria for ever! Check my signature for free stuffs!

Racoon:
Same fuel subsidy issue both of them have shamelessly lied to this nation that they have done away with but yet have been amassing billion paying same despite the unavailability of petroleum products and lack of adequate stats on daily crude oil consumption in Nigeria. Tinubu and Buhari really dealt with Nigeria

Because they are politicans, and most of nigeria prefers cheap fuel, damm the consequences...and politicans will do anything...including sacrificing the economy to Molech, to see that they win elections next season

SO, subsidy, even before 2015. We have lost billions over decades from this madness called subsidy.

FreeStuffsNG:
There's no more subsidy again. If there's subsidy today then NNPC would not have been able to make trillions in profits and pay dividends!

There is a subsidy. NNPC is being forced to pay for it from those same dividends.

Plus if there was no subsidy, that profit would have been much much higher than that

Brendaniel:


And people like you supported him to do it...

Back to the topic:

We warned them about Tinubu, we warned about the way and manner he removed subsidy, we warned about how he floated the naira...

We were called haters for speaking the truth...

On subsidy removal and floating the naira, there was nothing that could be done. (That is why some of us believe that subsidy should have gone since 2012, even since 1993)

Years , nay decades of trying to keep subsides and keep the naira strong at all costs had led to a situation where the national debt was eating 99% of our revenue. At the end, whoever was in charge was going to make some harsh decisions.

This is not about defending tinubu, as I don't support him or any of the candidates, and even believe that APC should have been kicked out last year, but at the point we were, keeping subsides or lkeeping a strong naira was not sustainable.

Again, we should have made these decisions over ten years ago.

nairalanda1:


There is a subsidy. NNPC is being forced to pay for it from those same dividends.

Plus if there was no subsidy, that profit would have been much much higher than that

You need to go read what subsidy means. Just in case you don't know, in present day Nigeria, you can bring in petrol at any price and sell at any price! Nobody will give you a dime if you sell below your cost price.
The closest to what NNPCL is doing is monopoly and not subsidy. It sells at a margin to Federal Government and monopolize that account. That's why it made billions of dollars in profit.

And guess what, it’s now being paid into one man’s pocket - Tinubu’s pocket.

Tinubu will make of Nigeria what he made of Lagos.

nairalanda1:


On subsidy removal and floating the naira, there was nothing that could be done. (That is why some of us believe that subsidy should have gone since 2012, even since 1993)

Years , nay decades of trying to keep subsides and keep the naira strong at all costs had led to a situation where the national debt was eating 99% of our revenue. At the end, whoever was in charge was going to make some harsh decisions.

This is not about defending tinubu, as I don't support him or any of the candidates, and even believe that APC should have been kicked out last year, but at the point we were, keeping subsides or lkeeping a strong naira was not sustainable.

Again, we should have made these decisions over ten years ago.

I doubt there is any global power that doesn't do subsidy...

FreeStuffsNG:
You need to go read what subsidy means

NNPC Is the major importer, and imports fuel above N1000 and sells it between N580-750...AND the resulting shortfall is paid for by the government.

Subsidy

. Just in case you don't know, in present day Nigeria, you can bring in petrol at any price and sell at any price! Nobody will give you a dime if you sell below your cost price.

The problem is, a private importer, can't compete with NNPC's subsidised fuel under current conditions.

If you were importing fuel as a private importer, your selling price would be above N1200. Meanwhile, NNPC Is selling directly to marketers at a low price below N700. How would you compete?

That is how subsidy damages economies . It prevents competition.

The closest to what NNPCL is doing is monopoly and not subsidy. It sells at a margin to Federal Government and monopolize that account. That's why it made billions of dollars in profit.

And it could have made far more than that if there was no subsidy.

Brendaniel:


I doubt there is any global power that doesn't do subsidy...

And such subsides are either production subsides...which is what we don't do for our petroleum sector , or subsides for means tested poor people, not for everyone. And all are funded heavily by high tax uptake, and also because the gdp is far larger than Nigeria's gdp, even under the best of times (because many of these global powers earn most of their money from exporting manufactured goods and services, not from exporting oil and other raw materials like Nigeria and most African countries)...they can afford such things.

Again, at the end, fuel is sold at market price in most global powers. Government even heavily adds its own tax...which is far higher than what we can concieve here.

If we want to be like the global powers, we have to become a manufacutring nation, which we haven't become since independence. And which would require, roughly, several generations of hardship before we get there.

Don't vote for tinubu, he will scatter the country but some people no hear word. Now E don set .

nairalanda1:


And such subsides are either production subsides...which is what we don't do for our petroleum sector , or subsides for means tested poor people, not for everyone. And all are funded heavily by high tax uptake, and also because the gdp is far larger than Nigeria's gdp, even under the best of times (because many of these global powers earn most of their money from exporting manufactured goods and services, not from exporting oil and other raw materials like Nigeria and most African countries)...they can afford such things.

Again, at the end, fuel is sold at market price in most global powers. Government even heavily adds its own tax...which is far higher than what we can concieve here.

If we want to be like the global powers, we have to become a manufacutring nation, which we haven't become since independence. And which would require, roughly, several generations of hardship before we get there.

No, not just production subsidies, but food, education, healthcare, electricity and so on, if you need details I will supply them for you...

LagosPrince:
Don't vote for tinubu, he will scatter the country but some people no hear word. Now E don set .

We should not have voted for APC, but if we had voted for someone else, the same scenairo would have played out.

Infact, one thing some Obi supporters were saying was that their man would have done a gradual removal of subsides....say by pegging the price at N300. Which means that subsidy costs would have risen to around N900 per liter by now....which means we would have long since crossed the 10 trillion mark by now.

(That is why I believe Obi meant it when he said subsidy would go).

Subsidy on petrol always causes issues. If it is not corruption it is smuggling, if it is not smuggling it is loss of domestic refining capacity, and if it is not that, it is high amount of debt.

The amount mentioned up there would have been far less if TInubu had not restored subsidy by October 2023. But he did, and here we are . Bad economics is what NIgerian leaders do to get elected.

Brendaniel:


No, not just production subsidies, but food, education, healthcare, electricity and so on, if you need details I will supply them for you...

And I have pointed out to you that we are not a global power, so we don't have the gdp to fund tax on subsides..

Plus, the subsides are not for everyone, as in Nigeria.

There is a country that tried all you suggested...in the old USSR, and in many of its fellow communist countries...they subsidised everything....food, healthcare, housing ,etc.

The result was scarcity of many food items, as well as badly run public services. (As an example, one American who became a citizen of the DDR was happy to pay just 2 german marks as rent for his house, but that meant that maintenance of the house suffered.)

If you want a subsidy, either you pay a tax rate of 50% and live in a country that exports manufactured goods and services....or you end up like the USSR....and the DDR....collapsing under the massive debt incurred in 'keeping subsides'.

APC o

TemplarLandry:
Another joyful news {rumor} for HoeBee AKA Mr. Gbajue.

His bootlickers, come and rejoice too.

Na Obi say make una dey incompetent? 9 years of incompetence