The Federal Government of Nigeria paid paid N169.4 billion as subsidy in August to keep the pump price at N620 per litre, a document by the Federal Account Allocation Committee (FAAC) had shown.
The development comes, despite President Bola Ahmed Tinubu’s repeated assurances that fuel subsidies had been eliminated,
In the previous weeks, there have been growing concerns, fueled by reports, that the sustained price stability, even amid deteriorating exchange rates and international crude prices exceeding $95 per barrel, suggests the return of fuel subsidies.
With the international oil benchmark Brent crude selling at $95 per barrel and even reports of some countries selling at $100 per barrel, experts speculated that Nigeria PMP is bound to increase, especially considering the nation’s continuously depreciating currency. However, the price remaining stagnant leaves many wonder the Nigerian Government paid.
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According to a document by the Federal Account Allocation Committee (FAAC), in August 2023, the Nigerian Liquefied Natural Gas (NLNG) paid $275m as dividends to Nigeria via NNPC Limited. NNPC Limited used $220m (N169.4 billion at N770/$) out of the $275m to pay for the PMS subsidy. Then NNPC held back $55m, illegally.
The revelation by FAAC effectively indicates that the subsidy is back and NNPC is now taking NLNG dividends to pay the subsidy.
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According to Daily Trust, the move to make the payment of N169.4 billion has the blessings of the high level of government, a senior government official disclosed to our reporter.
The paper quoted the source saying, “If that payment was not approved, the country would have been thrown into serious crises because it was clear that the public could not bear in further depreciation in pump price, so something had to give.”
“Everything has been done to not offset the market balance until we are able to resolve the production with Dangote refinery as well as the loans, once this is settled, we should see some stability,’ the source said.