Nigeria spends N18.3 billion daily on fuel subsidy

The Minister of Finance, Budget and National Planning, Zainab Ahmed, said on Thursday the Federal Government spends N18.3 billion daily on fuel subsidy.

The minister stated this when she appeared before the House of Representatives Ad hoc Committee probing the fuel subsidy regime in the country.

The committee which is probing the country’s fuel subsidy regime from 2013 to this year on August 9 invited Ahmed and other agencies including the Nigeria Police Force, the Department of State Services (DSS), Office of the Accountant-General of the Federation and Shell Petroleum Development Company (SPDC) for questioning on the matter.

The officials were directed to appear before the committee with all the documents relating to subsidy claims and payments during the period.

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The minister told the panel that the government spends N283 per litre of Premium Motor Spirit (PMS) totalling N18.397 billion per day as subsidy.

She said: “Our projection for 2023 is that the average daily truck out will be N64.96 million litres per day; that is about 65 million per day, using an average rate at open market rate of N448.20k and then a regulator pump price of N165 per litre. This will translate to average under-recovery, I mean the difference between N165 and N448 of N283.2k.

“If we 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 N18.397billion.

“Therefore, the projection for the full year, from January to December will be N6.715 trillion. If you are projecting for half a year, it will be 50 percent and this will give us N3.375 trillion.”