According to the World Bank, subsidy payments could significantly impact public finance and pose debt sustainability concerns in Nigeria. Nigeria’s economy depends on petroleum, accounting for 90 percent of its exports and one-third of its GDP. However, the petroleum industry recently recorded zero revenue.
The Nigerian National Petroleum Company released a report in October 2022 that revealed that the agency recorded zero revenue from oil export due to the subsidy payment. Petrol subsidy alone for October 2022 gulped ₦199 billion. Nigeria incurs too much cost to pay fuel subsidies. There is a need to consider removing the fuel subsidy to fund other sectors of the economy.
In Nigeria’s 2023 budget, the federal government (FG) allocated ₦3.6 trillion to pay for fuel subsidies for the first half of 2023. This figure shows a huge gap compared to the allocated ₦443 billion subsidy payment for January to June 2022. The FG can utilize the enormous budget allocated to fuel subsidies to fund other strategic sectors….
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