Business

Amid Rising Debt, Subsidy Cost Jumps By 370%

Published

4 years ago

July 23, 2022

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.

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.

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.

Related Topics:debt management office subsidy

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Business

Why We Sited Our Multi-Billion Naira Automobile Firm Branch in Benin – Skyewise Group CEO

Published

1 day ago

May 4, 2026

Editor

Dr. Elvis Abuyere, Chief Executive Officer and Managing Director of Skyewise Group, an automobile firm, has explained the reason for establishing a branch of the company in Benin City, the Edo State capital, describing the ancient city as “a growing economy full of enormous potential for vibrant youth.”

He added that the company considers Edo State one of the most interesting states, noting that the decision aligns with its long-term vision.

Abuyere, who spoke in Benin on Monday while taking journalists on a tour of the new automobile facility, said:
“We started very small — from Abuja to Lagos and now Benin. It is a joy and privilege for us to have completed this amazing regional office with Skyewise Group.”

According to him, beyond the automobile business, Skyewise Group is in Benin to invest in real estate, logistics, youth empowerment, and credit management. “Aand also to lend our support to what the Edo State Government is doing, knowing the fact that there is an agenda,” he added.

The young CEO urged youths in Nigeria, particularly those in Edo State, to embrace entrepreneurship, stressing that “we believe it is the future of Africa,” especially Nigeria.

He said Nigeria stands as the giant of Africa and that its youth must take bold steps in the entrepreneurship landscape.

According to Abuyere, to ensure Edo youths actualise their entrepreneurial potential, the company has prepared soft loans to help them start businesses, adding that Skyewise Group is not limited to automobile operations.

He said: “More importantly to us is youth empowerment. We want our youth to be empowered, and this is where the Skyewise Foundation comes in.

“We believe the future of Africa is entrepreneurship, and that future lies in the hands of the young people of Nigeria. We want to empower them to stand the test of time, build something meaningful, and reduce unemployment and insecurity in our land.

“I believe we need to begin taking bold steps by refining the mindset of our young people. We need to give them a sense of belonging and direction.

“We have been addressing the liquidity gap in society by providing microloans to support businesses in our environment and in Benin City.”

When asked why he chose Benin City for the multi-billion naira automobile firm, Abuyere noted: “I think this is the first automobile showroom in Edo State where you can see a car lifted from the ground floor to the first floor and beyond.”

Business

JUST IN: Nigerian Filling Stations Reduce Fuel Price After Hike

Published

3 days ago

May 2, 2026

Editor

Nigerian filling stations reduced their Premium Motor Spirit price on Saturday, barely 24 hours after the hike.

Checks by DAILY POST showed that Ranoil, Empire Energy, and other filling stations in Abuja adjusted their petrol pumps to N1,365 and N1,375 per litre respectively, down from N1,440 per litre on Friday.

This means that petroleum marketers dropped their fuel price by N65 and N75 per litre. DAILY POST reports that the move was to attract patronage from customers.

Recall that three days ago, Nigerian filling stations had raised their petrol pump price to between N1,365 and N1,440 nationwide after Dangote Refinery and depot owners increased ex-depot prices to around N1,275 and N1,290 per litre.

According to DAILY POST, while the Nigerian National Petroleum Company Limited and MRS Bovas filling stations raised their petrol price to around N1,365 per litre, others adjusted theirs above N1,440 per litre.

However, with the latest fuel price reduction by Ranoil and Empire Energy, the majority of filling station outlets now dispense petrol between N1,365 and N1,375 per litre.

This development comes as the ripple effect of crude oil prices continues to impact Nigeria’s domestic fuel price.

Brent and West Texas Intermediate crude rose to $114 and $105 per barrel before dropping to $108 and $101 after the filing of this report.

Business

Dangote Refinery Hikes Petrol Price

Published

7 days ago

April 29, 2026

Editor

Dangote Refinery has increased the ex-depot price of petrol by N75.

The refinery announced the increase on Wednesday, hiking the the price from N1,200 to N1,275 per litre.
In the same way, coastal prices have gone up to N1,215 per litre.

This adjustment amid Brent crude trading at $114.80 per barrel marks a 3.15% increase.

DAILY POST reports that Brent crude has increased to $115 per barrel, while West Texas Intermediate rose to $103 per barrel on Wednesday.