Business
Amid Rising Debt, Subsidy Cost Jumps By 370%
Published
3 years agoon
By
Editor
The cost of fuel subsidy is estimated to increase by 369.93 per cent from 2021 to 2023, according to The PUNCH.
In 2021, the Nigerian National Petroleum Corporation said fuel subsidy gulped N1.43tn, although there was no record for under-recovery in January.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, had said on Thursday at the presentation of the 2023-2035 Medium Term Expenditure Framework & Fiscal Strategy Paper in Abuja that the Federal Government had projected to spend N6.72tn on petrol subsidy payments in 2023.
However, Ahmed said subsidy payment projection was based on two scenarios, with the first being spending an estimated N6.72tn for the entire year and the second, removing subsidy by June 2023 with the government spending N3.36tn rather than the full estimated N6.72tn.
READ ALSO: Debt Servicing May Take All Of Nigeria’s Revenue By 2026, IMF Warns
She further noted that both scenarios had implications for net accretion to the federation account and projected deficit levels.
In January this year, the Federal Government decided to retain the controversial fuel subsidy for another 18 months following threats of protests by the Nigerian Labour Congress and other interest groups.
The International Monetary Fund recently said the fear of political resistance, widespread corruption and pressure from interested groups were hampering the removal of the fuel subsidy in Nigeria.
In the first five months, Nigeria spent N1.27tn on petrol subsidy, with a plan to spend N4tn this year.
It was also disclosed that Nigerian National Petroleum Company Limited would continue to fund the N4.19tn fuel subsidies for the 2022 fiscal year on behalf of the federation despite being a commercial venture and its stance of no longer remitting any money to the Federation Accounts Allocation Committee for sharing to the three tiers of government monthly.
The increasing cost of fuel subsidy is projected to persist amid declining revenues and rising debts.
According to a recent report, the FAAC allocation to the federal, state and local governments declined to 2.18tn between January and March 2022 when compared to the N2.24tn disbursed in the preceding quarter, Q4 2021.
The Debt Management Office recently disclosed that Nigeria’s total public debt stock increased to N41.60tn in the first quarter of 2022 from N39.56tn as of December 2021, showing an increase of N2.04tn within a period of three months.
During the presentation of the MTEF and FSP paper, the finance minister disclosed that the cost of servicing debt surpassed the Federal Government’s retained revenue by N310bn in the first four months of 2022..
It was disclosed the Federal Government’s total revenue for the period was N1.63tn, while debt service gulped N1.94tn.
The IMF has also said that Nigeria will likely depend on overdrafts from the Central Bank of Nigeria to fund its proposed petrol subsidy bill.
READ ALSO: Nigeria’s Debt Set To Hit N45trn As Plan To Borrow Additional N6.39trn Emerges
The finance minister has also said that Federal Government was planning to tap €2bn ($2.2bn) of the money it raised in a Eurobond sale last year and targets more local borrowing in 2022 to help fund fuel subsidy.
The World Bank recently warned that increasing fuel subsidy puts the Nigerian economy at a high risk as subsidy payments could significantly impact public finance and pose debt sustainability concerns.
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Business
NNPCL Reduces Fuel Price After Dangote Refinery’s Adjustment
Published
2 weeks agoon
August 14, 2025By
Editor
The Nigerian National Petroleum Company Limited has reduced its premium motor spirit pump price on Thursday, according to DAILY POST.
It was confirmed that NNPCL retail outlets in the Federal Capital Territory, Abuja, have reduced their pump price to N890 per litre from N945.
This new fuel price has been reflected in NNPCL retail outlets such as mega station Danziyal Plaza, Central Area, Wuse Zone 4, Wuse Zone 6, and other of its filling stations in the nation’s capital.
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The latest downward review of fuel price in NNPCL outlets represents an N55 reduction in fuel pump price.
“It was reduced to N890 per litre this afternoon, down from N945,” an NNPCL fuel attendant told DAILY POST anonymously on Thursday.
This comes a Nigerian filling station, MRS Empire Energy, on Thursday adjusted their fuel pump price to N885 and N946 per litre, down from N910 and N955 per litre.
The latest fuel price reduction trend is unconnected to Dangote Refinery’s ex-depot petrol price adjustment by N30 to N820 per litre from N850 and the price of crude oil in the international market.

Dangote Petroleum Refinery has announced a reduction in the ex-depot (gantry) price of Premium Motor Spirit, PMS, commonly known as petrol, by N30, from N850 to N820 per litre, effective from August 12, 2025.
This was disclosed in a statement by the company’s spokesman, Anthony Chijiena, on Tuesday.
The 650,000-barrel-per-day plant said the move is part of its unwavering commitment to national development, assuring the public of a consistent and uninterrupted supply of petroleum products.
READ ALSO:Dangote Refinery Gets New CEO
“In line with our dedication to operational excellence and sustainable energy solutions, Dangote Petroleum Refinery will commence the phased deployment of 4,000 CNG-powered trucks for fuel distribution across Nigeria, effective August 15, 2025,” said Chijiena.
The announcement comes as the refinery prepares to commence direct fuel distribution nationwide. The development is expected to lead petroleum product marketers to reduce their pump prices in the coming days.
In Abuja, the retail fuel price stood between N885 and N970 per litre as of Tuesday evening.
Business
Indian Refiners Abandon Russia For Nigerian Crude, As Dangote Refinery Relies On US
Published
3 weeks agoon
August 11, 2025By
Editor
India Refineries have abandoned Russian crude for Nigerian crude, while domestic refiner Dangote Refinery relies heavily on West Texas Intermediate crude from the United States of America.
This followed a recent sanction threat by US president Donald Trump on India over continued patronage of Russian crude.
According to Reuters, industry sources said that Indian Oil Corporation recently bought one million barrels of Nigeria’s Agbami crude for September 2025 delivery in a tender awarded to global trader Trafigura.
Also included are one million barrels of Angola Girassol, one million barrels of US Mars, three million barrels of Abu Dhabi Murban, and two million barrels of Nigerian oil, according to Reuters.
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The report noted that the purchase is part of a broader sourcing spree that has seen Indian refiners secure millions of barrels from non-Russian sources post July 2025.
Meanwhile, Indian refiners secured purchases of Nigerian crude grades; the $20bn Dangote Petroleum Refinery in Ibeju-Lekki, Lagos, is relying on around 60 percent on US and other imoorts to feed its processing units.
Data showed that the refinery imported an average of 10 million barrels in July 2025, saying it was increasingly relying on the US for its feedstock despite the naira-for-crude deal with the Federal Government, which kicked off in October last year.
According to Reuters, the Indian Oil Corp and Bharat Petroleum have bought a million barrels of non-Russian crude billed for delivery in September and October after the US pressured India to halt purchases from Russia.
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Indian state refiners had been largely absent from the Nigerian crude market spotlight since 2022; they have in the past concentrated on Russian crude amid the Russian-Ukrainian war. However, the Indian refiners paused Russian purchases in late July 2025 after pressure from US President Donald Trump.
On the part of Dangote Refinery, data from commodities analytics firm Kpler showed that in July, US barrels accounted for about 60 percent of Dangote’s 590,000 barrels per day of crude intake, with Nigerian grades making up the remaining 40 percent.
In July, the Dangote refinery’s crude imports surged to a record 590 kbd—driven largely by US barrels overtaking Nigerian supply for the first time—amid ongoing domestic sourcing challenges, Kpler reports.
“While WTI has held a significant share in Dangote’s import slate since March, this is the first time US crude has overtaken Nigerian supply—a shift driven by several factors,” Kpler stated.
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