The Minister of Finance Budget and National Planning, Zainab Ahmed, has said the federal government is spending N18.397bn daily on fuel subsidy and putting the country in dire financial stress.
Nigeria must at a point take the painful decision of jettisoning the fuel subsidy.
She disclosed this on Thursday while answering questions from members of the House of Representatives Ad-hoc committee investigating the petroleum products subsidy regime in the country.
She said, “For 2023, the projection is that the average daily truck out will be N64.96 million litres per day; that is about 65 million per day, using an average rate at the open market rate of N448.20k and then a regulator pump price of N165 per litre. This gives us an average under-recovery i.e. the difference between N165 and N448 of N283.2k.
“So, just multiply the amount of litre per day, the open market exchange rate of naira to the dollar and then, the gap between the pump price and open market price, the total amount of subsidy per day is N18.397bn.
“So, if you are projecting for the full year, from January to December, it will be N6.715tn. If you are projecting for half a year, it will be 50 per cent of that, 3.375tn.”
She said that the ministry had consulted with the leadership of the National Assembly and had submitted the draft Medium-Term Expenditure Framework (M-TEF) for 2023 to 2025, took some inputs and went to the National Economic Council (NEC) and the Federal Executive Council (FEC).
Ahmed added that the FEC had approved the M-TEF and the president had conveyed the M-TEF to the National Assembly.
At the hearing, the Executive Chairman of the Federal Inland Revenue Service (FIRS), Muhammad Nami, explained that its role was purely the collection of revenue for the government and not keeping records of how the monies were expended.
However, the chairman of the ad-hoc committee, Ibrahim Almustapha Aliyu, and members questioned the rationale behind the subsidy regime as well as payments and funds withdrawal from the Consolidated Revenue Fund (CRF) and Excess Crude Account to fund subsidy.