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Nigeria’s NNPC spent $9.7 billion as subsidy on ‘scarce’ petrol in 2022

Published

1 year ago

January 21, 2023

The latest data from the state-owned firm, Nigerian National Petroleum Company Limited (NNPC), Nigeria spent 4.39 trillion Naira ($9.7 billion) on a petrol subsidy last year.

The figure is a far rise in petrol subsidy payments reportedly gulped over N1.15 trillion in 2021 alone,

The data also confirmed the government’s initial position the NNPC did not remit funds to federal accounts last year. The government maintained that the expended subsidy is the cause of Nigeria’s recent dwindling public finances.

Nigeria’s NNPC has been the subject of immense corruption allegations, so much that President Buhari on coming into the office on the mantra of fighting Nigeria’s neck-deep corruption, made himself the Minister of Petroleum, perhaps to face the menace in the oil sector head-on having been a Minister of Petroleum Minister during past military government in Nigeria.

Nigeria is producing well below the nation’s OPEC quota of 1.8 million bpd, due in large part to theft from pipelines that have curtailed production.

Industrial-scale oil theft is also another reason for Nigeria’s revenue shortfall. Nigeria’s oil auditing agency, NEITI, indicated that in 2019, the West African country lost 42.25 million barrels of crude oil to oil theft, valued at $2.77 billion.

Finance minister Zainab Ahmed has said the country will keep its costly but popular petrol subsidy until mid-2023 and set aside 3.36 trillion naira ($7.5 bln) to spend on it.

Despite her increasing debt profile, Nigeria’s government in January 2022 postponed its planned removal of subsidies on petroleum products till further notice.

FUEL SCARCITY

Meanwhile, Nigerians have been having a tough time purchasing premium motor spirit (PMS) popularly known as petrol for over four months. Petrol stations across the country have been greeted with long queues which usually prolong into streets and major roads across the country, thus causing gridlock as it affects the flow of traffic.

Petrol stations currently sell the product for as high ₦300, almost double the official subsidised regulated price of ₦175. There have been no clear official reasons for the prolonged scarcity as Nigerians continue to suffer from the pains of the uncertain cost, the resulting traffic situation and other risks caused by the situation.

Related Topics:Featured Fuel subsidy Nigeria

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Nigeria wants $2.25 billion World Bank loan

Published

1 day ago

April 23, 2024

Ifeoluwa Dada

Nigeria’s Finance Minister, Wale Edun, has revealed that the country is seeking up to $2.25 billion in World Bank loans and expects the bank’s board to approve the request in June.

The move was announced in a statement following the International Monetary Fund/World Bank spring meetings in Washington, D.C as the country also aims to issue diaspora bonds later this year to attract much-need foreign exchange into the country.

The World Bank loans would include $1.5 billion for development policy and $750 million for program-for-results, the statement said. It also said that the bank would meet in June to decide whether to approve the plan in its entirety.

The multilateral body is yet to comment on the revelation at press time.

Nigeria one of Africa’s biggest oil producers has struggled lately mainly over industrial-scale crude oil theft, and troubles getting foreign currency, which caused its naira currency to drop to all-time lows against the U.S. dollar. It has since recovered, though.

Already, the country is on record levels of debt, high unemployment, and large amounts of money from the central bank. However, Edun has insisted that the government had cut the money it borrowed from the central bank in half.

VenturesNow

Ghana’s finance minister anticipates debt restructuring MoU with lenders

Published

2 days ago

April 22, 2024

Ifeoluwa Dada

Ghana’s Finance Minister has announced that the country’s two main creditors will send him a draft Memorandum of Understanding (MoU) on a restructuring deal in May, signifying a major progress in the country’s debt reform.

Once the MoU is signed, it will make public the deal that was made in January to restructure $5.4 billion in loans with its official creditors, such as China and France.

The restructuring is a big step toward Ghana getting rid of its debt as it works to get out of the worst economic crisis in a generation. It should also allow the country to get more money from its $3 billion IMF program.

Mohammed Amin Adam said he was sure the International Monetary Fund (IMF) and the World Bank would work together at the Spring Meetings in Washington, D.C. In June, the Monetary Fund’s executive board will agree to review its staff-level deal.

From 2023 to 2028, Ghana’s national debt to gross domestic product level was supposed to go down by 15%. This guess says that the number will have gone down every year for six years, ending at 69.96% in 2028.

Ghana didn’t pay back most of its foreign loans in December 2022 because it became too expensive to do so. But now it needs to work out a deal with private holders of about $13 billion in foreign bonds. It has also changed most of its domestic debt.