ABUJA – Lawmakers in Nigeria’s upper house of parliament on Thursday approved a 129 billion naira ($422 million) payment to cover debts to local oil firms related to a fuel subsidy programme.
The Senate listed 67 companies that will get a portion of the payment.
The government has struggled for years to make timely subsidy payments to fuel importers. The more limited cash flow during the oil price crash exacerbated the issue.
Fuel subsidies are contentious in Africa’s top crude oil producer, which imports most of its gasoline due to underperforming refineries. Prices are kept artificially low at 145 naira ($0.48) per litre.
Over the past two years, Nigeria’s state oil company NNPC has itself imported close to 90 percent of the nation’s gasoline because the difference between the price cap and international fuel costs made it unprofitable for private marketers to import.
($1 = 305.9000 naira)