February 25, 2024

Experts demand interrogation of NNPC’s request for N3 trillion petrol subsidy for 2022


Adebayo Obajemu

Following the finance minister’s announcement that the federal government would need about 3 trillion to fund the fuel subsidy for the year 2020, some analysts and industry experts have called for the interrogation of the 3 trillion demand, calling it outrageous.

Speaking on the matter, professor Adeagbo Moritiwon, a political scientist said the amount is yet another reminder that there is so much politics and confusion in the subsidy arena that needed to be cleared up, adding that “the politics of fuel subsidy is confounding, and it will be hard for Nigerians to actually know how much the subsidy is. We can recall that there have been conflicting figures in the past.

Speaking further he said ” Now, the minister of finance said that a request had been presented to Council for Council’s consideration to make additional funding provisions to enable them meet incremental fuel subsidy request in the 2022 budget.

He said that in the 2022 budget as appropriated, a provision of N443 billion for a subsidy for January to June was made, saying now that subsidy will no longer be removed, the actual amount has ballooned to 3 trillion.
Moritiwon queried the statistics that was used to arrive at the 3 trillion, saying the NNPC ,the finance ministry and the federal government should tell us how they arrived at the figure, and the actual volume of oil locally consumed for which subsidy is being paid.
” The mathematics of NNPC and all the processes involved in arriving at the 3 trillion is voodoo mathematics. They should involve civil society groups such as SERAP if they are transparent”, he said.

Dr Olufemi Omoyele , a public affairs analyst and director of Entrepreneurship at Redeemers University said ” I think I agree with the governors on the need to investigate and scale down on the money for Subsidy. I’m not comfortable with 3 trillion figure, especially when past experiences have shown discrepancies in the actual volume of petrol we consume locally.
He called on National Assembly to get involved and set up a committee to investigate the volume of petrol we consume with a view to knowing what the subsidy cost will be.

Amuda Akanbi, an oil and gas
expert told this medium that ” the difficulties in all these are in reconciling conflicting figures on the actual volume of petrol that is being consumed locally, it is when that’s done that we can interrogate the 3 trillion figure.”

Recall that the Nigerian National Petroleum Company (NNPC) has presented to the ministry a request for N3 trillion as fuel subsidy for 2022. What this means is that the government has to make an incremental provision of N2.557 trillion to be able to meet the subsidy requirement, which is averaging about N270 billion per month.

The minister of finance said on Monday that ” in 2021, the actual under-recovery that has been charged to the federation was N1.2 trillion, but in 2022, because of increased crude oil price per barrel in the global market, now at $80 per barrel and also because an NNPC’s assessment is that the country is consuming 65.7 million litres per day, now we’ll end up with the incremental cost of N3 trillion in 2022.”

She said: “So even as the government is not immediately removing the fuel subsidy, we have to make sure that what the nation is incurring is efficient, and that it is a real cost that has been consumed by the country.

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