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FG projects N18bn daily petrol subsidy

The total projected amount for petrol subsidy per day in 2023 is valued at N18.397 billion.

Minister of Finance, Zainab Ahmed disclosed this before the House of Representatives ad-hoc committee investigating the subsidy regime from 2013 to 2021.

This according to her was arrived at, using information provided by the Nigeria National Petroleum Company (NNPC).

The Minister said the projection is that the average daily truck out would be 64.9 million litres per day, using an average exchange rate and open market rate of N448.20K, and a regulated pump price of N165 naira per liter.

For 2023, the projection is that the average daily truck-out will be N64.96 million per day; that is about 65 million per day, using an average rate at open market rate of N448.20 and then a regulator pump price of N165 per litre.

This gives us an average under-recovery, that is the difference between N165 and N448, of N283.2,” she said.

“So, just multiply the amount of litre per day, the open market exchange rate of naira to the dollar and then, the gap between the pump price and open market price, the total amount of subsidy per day is N18.397bn.“

So, if you are projecting for the full year, from January to December, it will be N6.715 trillion. If you are projecting for half a year, it will be 50 percent of that, 3.375tn.

I said earlier in the recommendations that we sent to parliament for consideration on MTEF is half-year, that will be N3.357 trillion.

Fuel subsidy is the difference between the pump price which is now fixed at N165 (per litre) and the landing cost which we are projecting at an average of N448 per litre in 2023. Even now, the cost is around that.

“So, the PMS subsidy we are carrying today in the nation is around N283 per litre; that is what we are carrying. So, it is the difference between the pump price and the landing cost of petroleum products in the country

She said there is a presidential revenue monitoring committee, led by the ministry to reconcile the revenue generated, where agencies are made to remit any under-remittance.

Chairman of the adhoc committee, Ibrahim Aliyu raised concerns over a recent remark by the minister that the country would be requiring the sum of N6.7 trillion for subsidy in 2023.

He noted that the committee was constituted to investigate the effectiveness or otherwise of the subsidy regime.

The committee invited the Accountant General of the Federation to appear before the committee on August 25 to respond to other issues raised.

Reporting by Ibrahim Shehu; editing by Muzha Kucha