back to top

Controversial PMS subsidy to hit N5.4trn in 2024 – Wale Edun

THE Nigerian Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has disclosed that the fuel subsidy was projected to hit N5.4 trillion this year, an official acknowledgement that the federal government has reintroduced the controversial subsidy.   

Edun’s disclosure was contained in a report, ‘Accelerated Stabilisation and Advancement Plan (ASAP),’ he reportedly presented to the Nigerian President Bola Tinubu on Tuesday, June 4, according to a ThisDay report.

The draft copy of the ASAP presented to the president was accompanied by an Executive Order to bolster the plan.

It revealed that the federal government is still supporting downstream consumption. “At current rates, expenditure on fuel subsidy is projected to reach N5.4 trillion by the end of 2024. This compares unfavourably with N3.6 trillion in 2023 and N2.0 trillion in 2022.”

The ASAP is designed to address key challenges affecting Tinubu’s reform initiatives and stimulate development in various sectors of the economy.

Edun on Channels Television on Sunday, June 2 hinted that a stabilisation package was underway.

On Tuesday, Tinubu ordered the finance minister to present a template for the new proposed minimum wage within the next 48 hours.

The plan gave an insight into how the Tinubu-led administration seeks to address some of the challenges caused by its reform agenda,  among others.

It is said to be structured to advance Tinubu’s economy-related eight priority areas and broken down into different sub-committee plans.

The sub-committee plan includes agriculture and food security; energy, oil and gas, and power; health and social welfare; and business support.

Read Also:

The executive summary of the plan shows that ASAP is designed to curb the “difficult economic conditions threatening to unravel bold reforms undertaken by Mr. President.”

It noted that the oil sector is currently beset by problems of extensive pipeline vandalisation;  high cost of production with a 40 per cent cost premium above other jurisdictions; production level at 1.4 million barrels per day (mbpd), below the budgeted level of 1.78mbpd, thereby straining country’s fiscal position, and added that the government still supporting downstream consumption.




     

     

    In a October 2023, The ICIR reported  development from the Nigerian National Petroleum Company Limited (NNPCL) to have confirmed that the subsidy was back despite the federal government’s declaration that “fuel subsidy is gone.”

    The report showed that despite the wide gulf between the landing cost and the selling price of fuel, the NNPCL failed to provide answers to who bridges the gap in the cost, which confirmed that the government was still paying subsidies.

    In another report on February 17 this year, an energy expert told The ICIR that Nigeria would likely witness another season of cross-border smuggling of premium motor spirit (PMS), known as fuel, as the corruption-ridden fuel subsidy regime was already back.

    It further contained that the International Monetary Fund (IMF) after its executive board’s financing assessment meeting with Nigeria confirmed that the Nigerian government brought back petroleum subsidies through the back door.

    Advertisements

    Join the ICIR WhatsApp channel for in-depth reports on the economy, politics and governance, and investigative reports.

    Support the ICIR

    We invite you to support us to continue the work we do.

    Your support will strengthen journalism in Nigeria and help sustain our democracy.

    If you or someone you know has a lead, tip or personal experience about this report, our WhatsApp line is open and confidential for a conversation

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here


    Support the ICIR

    We need your support to produce excellent journalism at all times.

    - Advertisement

    Recent

    - Advertisement