Fuel Subsidy Reportedly Back As FG Pays N169.4 Billion in August

 

A payment of N169.4 billion has been reportedly paid by the Federal Government as subsidy in August.

 

It is alleged the payment was to keep the pump price at N620 per litre.

 

According to a report by DailyTrust, a document by the Federal Account Allocation Committee (FAAC), reviewed on Wednesday, September 20, showed that in August 2023, the Nigerian Liquefied Natural Gas (NLNG) paid $275m as dividends to Nigeria via NNPC Limited. NNPC Limited used $220m (N169.4 billion at N770/$) out of the $275m to pay for the PMS subsidy. Then NNPC held back $55m.

 

The revelation by FAAC effectively indicates that the subsidy is back and NNPC is now taking NLNG dividends to pay the subsidy, the report added.

 

Also, the current price stagnation despite the worsening exchange rate and international crude price crossing $95 a barrel suggests a return of subsidy despite the numerous assurances by President Bola Ahmed Tinubu that the subsidy is gone.

 

The revelation by FAAC indicates that the subsidy is back and NNPC is now taking NLNG dividends to pay the subsidy.

 

Reports by the Nigerian National Petroleum Corporation (NNPC) to the Federation Accounts Allocation Committee (FAAC), showed that petrol subsidy cost N1.57 trillion in 2021 alone and another N1.27 trillion from January to May 2022.

 

Another N3 trillion was used to cover petrol subsidy costs from June 2022 to June 2023.

 

The report comes barely four months after President Bola Tinubu on May 29, declared that there would no longer be a petroleum subsidy as the current 2023 budget did not contain it.

 

He revealed that the current 2023 budget has provision for the fuel subsidy till June.

 

Tinubu stated that funds for subsidies would be diverted to other things like public infrastructure, education, health care, and jobs but the removal of subsidy led to a massive increase in the cost of fuel which had a ripple effect on the economy skyrocketing prices of everything.