Page 11 - AfrOil Week 39 2022

AfrOil POLICY AfrOil

At the same time, she said, Nigeria is using tools the country’s budget and has drained billions
developed by the World Bank and the Interna- in revenue from NNPCL. The cost to NNPCL
tional Monetary Fund (IMF) to ensure the sus- means it has not submitted any money to the
tainability of its public debt load. “These tools federal government this year.
include an annual Debt Sustainability Analysis Earlier in September, the World Bank told
(DSA) and a Medium Term Debt Management Nigeria that it would be ready to support Abuja
Strategy (MTDS) every four years,” she stated. in phasing out the policy. According to World
However, Oniha also expressed concern Bank president David Malpass, Nigeria should
about rising levels of public debt around the increase social assistance for the poor and vul-
world, noting that many governments had been nerable and put a stop to the subsidies.
borrowing more to compensate for stresses “President Malpass emphasized the impor-
resulting from the coronavirus (COVID-19) tance of integrating climate and development, Egypt aims to send gas to Lebanon via Jordan and Syria (Image: EIA)
pandemic and the Russia-Ukraine conflict. as well as the need for an enabling policy and
Under these circumstances, she said, Nigerian regulatory environment alongside strengthened
authorities at all levels must work to increase institutions in the energy sector,” a World Bank
revenue collections. statement said.
Oniha was speaking shortly after This Day The Nigerian government has estimated
published an article pointing out that the fed- that the subsidy will cost the country NGN6.72
eral government had spent NGN525.71bn trillion ($15.54bn) for the entirety of 2023. The
($1.22bn) on gasoline subsidies in the month Central Bank of Nigeria (CBN) has asked the
of August. This is equivalent to 94.77% of the government to “jettison the current fuel subsidy
NGN553.99bn ($1.22bn) in revenues earned by policy” due to the high cost to the economy. ™
state-owned Nigerian National Petroleum Co.
Ltd (NNPCL) in the same month, the newspa-
per said. NNPCL classifies the subsidy payment
as “under-recovery” in its accounting, This Day
noted.

Costs of subsidy
In related news, NNPCL also said last week
that with the cost of the controversial fuel sub-
sidy reaching NGN525.71bn in August, the
yearly sum spent for that purpose now stands at
NGN2.568 trillion ($5.94bn).
In April, the parliament approved an NGN4
trillion ($9.25bn) budget for the entire year,
despite widespread disagreement over the
policy.
The ever-increasing cost of keeping gasoline
prices low has started to have a serious strain on Oniha, pictured in August 2022, says debt levels are still sustainable (Photo: DMO)

NNPC inks deal with India’s

IOC to boost LPG supplies

NIGERIA NIGERIAN National Petroleum Co. Ltd production company, he noted.
(NNPCL) has made a deal with Indian Oil Corp. According to Adetunji, NNPC will eventu-
(IOC) to boost LPG (cooking gas) accessibility ally start to produce more of its own domestic
in Nigeria, the state-owned Nigerian company cooking gas supply, following the example
has revealed. of India, and is positioned to deploy 740 LPG
Speaking at the World LPG Association Micro-Distribution Centres (MDCS), 37 Filling
India-Nigeria summit in Abuja, Adeyemi Plants and Skids in its 541 stations within the
Adetunji, NNPCL’s group executive director next three years.
for downstream operations, revealed that the “Nigeria has identified its abundant gas
Indian government would supply 5mn tonnes of resources as fuel for energy transition which
LPG to Nigeria in 2022, a massive 194% increase informed her Net Zero commitments by 2060
from 1.7mn. and the declaration of 2021-2030 as Decade of
The gas will come from IOC, a govern- Gas,” Adetunji said, as widely quoted by local
ment-owned oil and gas exploration and media.

Week 39 29•September•2022 www. NEWSBASE .com P11