The latest figures released in the Monthly Financial and Operations March 2020 report shows fuel subsidy cost the nation 101.6 billion Naira from January – March 2020.

The country spent 43.31 billion Naira as subsidy on petrol in January, it incurred 20.68 billion Naira as under-recovery in February and spent 37.66 billion Naira as subsidy in March.

Last week, the Minister of State for Petroleum Resources in Nigeria, Mr. Timipre Sylva declared in a statement issued on Thursday last week that the Federal Government can no longer bear the cost of the subsidy. The Government pumps a huge amount of money yearly into it, and it only benefits the rich and not the poor. He said the ministry will soon send the revised Petroleum Industry Bill (PIB) to the National Assembly.

Petroleum subsidy was halted in March 2020 by the Petroleum Products Pricing Regulatory Agency (PPPRA) due to the impact of the COVID-19 pandemic on the global oil sector and in the Agency’s context, the Nigerian oil and gas sector. According to the Agency, the crash in oil prices made it easier for fuel subsidy by the Federal Government to end as petroleum prices will now be adjusted following global oil prices.

Former president of the Association of National Accountants of Nigeria, Dr Sam Nzekwe, said the government should completely halt the fuel subsidy. He however stated that for the efforts of the government not to be in vain, there is a need to fully liberalise the downstream oil sector to enable private marketers to fully participate in the importation of petroleum.

He said, “There is no need for subsidy again because they are using it to make unnecessary demands and this is the corruption that we are talking about. They are also using it to finance corruption too.

“The money that they would have used for other sectors or even send to FAAC is being used for subsidy and we cannot actually quantify its impact on the masses; rather, it is used to enrich a very few.”

“The NNPC should not be the only one importing petrol. The downstream sector must not continue like this. Other players should be allowed to play in the space too. The sector should be fully liberalised.”

“And it is because the NNPC is the only one importing and almost running everything that makes it simple for it to say whatever it wanted as expenses on subsidy or under-recovery. This should not continue.”

The National President of the Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, buttressed the point made by Nzekwe that the PPPRA should halt the subsidy but allow marketers to import freely.

“If you are stopping subsidy, fine. But let the operating environment be comfortable enough for every player to operate fairly.”

The PPPRA announced in May that private marketers now have permits to import refined oil.