Agora Policy, an Abuja-based think tank, has warned that Nigeria’s petrol subsidy will reach an unprecedented level in 2024, following N4.2 trillion spent from January to August this year.
Thank you for reading this post, don't forget to subscribe!Despite the supposed end of the subsidy in mid-2023, the organization noted that the subsidy has not only returned but is now larger than ever before.
According to Agora Policy, the petrol subsidy amounted to N5.10 trillion in 2023, nearly doubling the previous record set in 2022. The think tank projects that 2024 is on track to surpass this, setting an all-time high.
The report highlights Nigeria’s growing expenditure on petrol subsidies over the years, with a total of N20.37 trillion spent from January 2006 to July 2024. Notably, 2023 alone accounted for over 25% of this total, while just seven months of 2024 contributed 20.67%.
Agora Policy also pointed out that petrol subsidy as a percentage of gross oil revenues surged to 126% in 2023 and 113% in the first seven months of 2024, emphasizing the increasing financial burden.
The think tank noted that, as a percentage of GDP, the subsidy reached 2.2% in 2023, a level only exceeded in 2011 during what was considered a critical tipping point.
The report follows recent revelations that President Bola Tinubu approved the use of NNPC’s 2023 final dividends to cover the subsidy, while the national oil company claimed that the federal government owes it N7.8 trillion for subsidy payments. The NNPC also admitted to selling petrol at only half the landing cost.
