Finance Minister Zainab Ahmed told federal lawmakers that N6.7trn ($15.9bn) will be spent on petrol subsidies in 2023: “From January to December, it will be N6.715trn. If you are projecting for half a year, it will be 50% of that, N3.375trn.”
The fund Nigeria spends on petrol subsidy is over a third of its current 2022 budget. It is also the highest single component in its medium-term budget, surpassing the funds earmarked for education, health, security and infrastructure.Although Nigeria is the largest producer of crude oil in Africa, it imports all its petrol because of the absence of functional refineries.
Global oil prices rise, Nigeria’s subsidy payments increase
Petrol is currently being sold for about N165 ($0.3) per litre. According to the finance minister, N283 ($0.67) is spent on subsidising each litre of petrol.“[Therefore], the petrol subsidy we are carrying today in the nation is around N283 per litre[…], it is the difference between the pump price and the landing cost of petroleum products in the country,” she says.
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