Page 11 - DMEA Week 26 2022
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DMEA FUELS DMEA
NNPC data shows huge
increase in Nigerian subsidies
AFRICA THE Nigerian government spent nearly three a total of NGN2.84 trillion ($6.84bn) on the sub-
times as much on domestic gasoline subsidies in sidy policy over the 17-month period since the
the first five months of 2022 as it did in the same beginning of 2021, Vanguard noted.
period of last year, according to the national oil The steep bill for domestic gasoline subsi-
company (NOC). dies has been preventing Nigeria from taking
Vanguard, citing newly released data from full advantage of the surge in global oil prices,
Nigerian National Oil Co. Ltd (NNPC Ltd), according to Professor Adeola Adenikinju,
reported on June 27 that Abuja had paid out director of the Centre for Petroleum, Energy
NGN1.274 trillion ($3.07bn) in gasoline sub- Economics and Law at the University of Ibadan.
sidies between January and May. This marks a “It is why we are not benefiting now because,
190.62% increase on the figure of NGN438.6bn on the one hand, the price of crude is going up,
($1.06bn) recorded in the first five months of but we have to spend that money to import
2021, it stated. petroleum products which we now sell at a
The newspaper also offered a breakdown of reduced price,” he said, according to Vanguard.
the subsidy payments during the five-month “It is rich countries that can afford subsidies. We
period. It said the government had spent NGN are poor, and that is the reality. We don’t have
227.72bn ($548.72mn) on subsidies in May, money that can allow us this way of life – the
NGN503.31bn ($1.21bn) in April, NGN152bn luxury that subsidy is.”
($366mn) in March, NGN253bn ($609.64) in Adenikinju went on to say that he believed
February and NGN143.72bn ($346.31mn) in that the Nigerian government would obtain
January. more benefits from subsidising domestic prices
These numbers represented, respectively, for diesel, which is a crucial fuel for transport
a 99.2% increase on the May 2021 figure of and small-scale power generation. The eco-
NGN114.34bn ($275.52mn at current exchange nomic impact of diesel subsidies would be more
rates), a 398% increase on the April 2021 figure obvious to Nigeria’s poor and working-class cit-
of NGN126.29bn, a 35.7% increase on the March izens, he argued.
2021 figure of NGN111.96bn ($304.31mn), “Many firms are running their generators
a 318.8% rise on the February 2021 figure of with diesel. Commercial goods are moved by
60.4bn ($145.54mn) and a 466% rise on the Jan- roads using diesel. Diesel is very expensive, but
uary figure of NGN25.37bn ($61.13mn), Van- we are not subsidising it,” he noted. “Also, kero-
guard reported. sene is also expensive [for] low-income house-
Nigeria’s National Assembly has authorised holds, and yet we are not subsidising it but petrol,
the federal government to spend NGN3 trillion which is consumed by the middle class. [That] is
on the gasoline subsidy this year. Abuja has spent what we are subsidising,” he added.
Week 26 30•June•2022 www. NEWSBASE .com P11
