MON, SEPT 7 2020-theG&BJournal-From 2006 to 2019, fuel subsidy gulped N10.413 trillion Naira. That is an average of N743.8 billion per annum, according to figures by the NNPC.
The breakdown is as follows;
In 2006 Subsidy was N257bn
-In 2007 Subsidy was N272bn
-In 2008 Subsidy was N631bn
-In 2009 N469bn
-In 2010 N667bn
-In 2011 N2.105tn
-In 2012 1.355tn
– In 2013 N1.316tn
– In 2014 N1.217tn
-In 2015 N654bn
-In 2016 Figure Not Available
-In 2017 Subsidy was 144.3bn
-In 2018 N730.86bn
-And in 2019 Subsidy was N595bn
The Minister of Information and Culture Lai Mohammed, provided the figures during the press conference he addressed today on the recent increases in petrol and electricity prices.
Just like President Muhammadu Buhari said during his address to government officials attending the First Year Ministerial Performance Review Retreat, Lai Mohammed told newsmen that subsidizing fuel is no longer feasible, especially under the prevailing economic conditions in the country.
‘’The government can no longer afford fuel subsidy, as revenues and foreign exchange earnings have fallen by almost 60%, due to the downturn in the fortunes of the oil sector.’’
The Minister gave an elaborate defence of the decision to deregulate of the prices of PMS.
He said, ‘’ when oil prices collapsed at the height of the global lockdown – was the deregulation of the prices of PMS. As I said earlier, the benefit of lower prices at that time was passed to consumers. Everyone welcomed the lower fuel price then. Again, the effect of deregulation is that PMS prices will change with changes in global oil prices. This means quite regrettably that as oil prices recover, there will be some increases in PMS prices. This is what has happened now.’’
According to the Minister, ‘’in spite of the recent increase in the price of fuel to 162 Naira per litre, petrol prices in Nigeria remain the lowest in the West/Central African sub-regions. He gave comparative analysis of petrol prices (Naira equivalent per litre) in the sub-regions, which are substantially higher, given the current price in Nigeria which he estimates at 162 Naira per litre.
His analysis shows that in Ghana petrol sells for N332 per litre, Benin N359 per litre, Togo N300 per litre, Niger N346 per litre, Chad N366 per litre, Cameroon N449 per litre, Burkina Faso N433 per Litre, Mali N476 per litre, Liberia – N257 per litre, Sierra Leone – N281 per litre, Guinea – N363 per litre and Senegal N549 per litre.
‘’ Outside the sub-region, petrol sells for 211 Naira per litre in Egypt and 168 Naira per litre in Saudi Arabia. You can now see that even with the removal of subsidy, fuel price in Nigeria remains among the cheapest in Africa,’’ the Minister said.
While addressing the recent service-based electricity tariff adjustment by the Distribution Companies (DISCOS) which he says the government has been supporting.
He said, ‘’to keep the industry going, the government has so far spent almost N1.7 trillion, especially by way of supplementing tariffs shortfalls. The government does not have the resources to continue along this path. To borrow just to subsidize generation and distribution, which are both privatized, will be grossly irresponsible.
But in order to protect the large majority of Nigerians who cannot afford to pay cost-reflective tariffs from increases, the industry regulator, NERC, has approved that tariff adjustments had to be made but only on the basis of guaranteed improvement in service. Under this new arrangement, only customers with guaranteed minimum of 12 hours of electricity can have their tariffs adjusted. Those who get less than 12 hours supply will experience no increase. This is the largest group of customers.’’
He estimates the cost per kwh of electricity in Nigeria at N49.75 and showed comparative figures (naira equivalent) in some African countries including Senegal N71.17, Guinea N41.36, Sierra Leone N106.02, Liberia N206.01, Niger N59.28, Mali N88.23, Burkina Faso N85.09 and Togo 7N9.88 that have significantly higher tariff than Nigeria.
‘’ Despite the recent service-based tariff review, the cost of electricity in Nigeria is still cheaper or compares favourably with that of many countries in Africa,’’ Lai Mohammed said.
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