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

Published

2 years 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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IMF mission concludes 4th loan program assessment in Egypt

Published

2 hours ago

November 22, 2024

Ifeoluwa Dada

Following the completion of a recent visit to Egypt, the International Monetary Fund (IMF) has announced that its mission had achieved significant strides in policy talks aimed at concluding the fourth review of the IMF loan program.

The review is the fourth in Egypt’s most recent 46-month IMF loan program, which was authorised in 2022 and increased to $8 billion this year following an economic crisis characterised by high inflation and chronic foreign exchange shortages. It may unleash more than $1.2 billion in financing.

Along with reaffirming its commitment to maintain a flexible exchange rate system, the IMF stated that Egypt “has implemented key reforms to preserve macroeconomic stability,” including the unification of the currency rate that facilitated imports.

Earlier on Wednesday, Egypt’s Prime Minister Mostafa Madbouly said Cairo has asked the IMF to modify the targets for the programme not only for this year, but for its full duration, he added without giving more details.

“Discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review,” the IMF added in its statement.

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Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

2 days ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.