Fuel Subsidy To Hit N6.884trn By Dec –Report

Fuel subsidy from August 2023 will hit N6.884 trillion by December 2024, a report on a forecast by the Nigerian National Petroleum Company Limited (NNPCL) has posited.

The report seen by journalists yesterday also indicated that the heavy financial burden leaves NNPC Ltd unable to remit N3.987 trillion in taxes and royalties.

It stated that the NNPC communicated to President Bola Tinubu that it would be unable to remit taxes and royalties to the federation account due to the “subsidy shortfall/ foreign exchange differential.”

“Subsidy removal notwithstanding, NNPC is still saddled with the burden of financing PMS imports to guarantee energy security to the nation,” the report stated.

It further revealed that President Tinubu has approved the request by NNPC to use its 2023 final dividends to cover fuel subsidy payments.

To support NNPC’s cash flow, Tinubu has also approved the suspension of 2024 interim dividends. The corporation projects that subsidy costs will exceed N5 trillion in 2024.

The company utilizes a “derived FX rate” to keep petrol prices within the N600-N700 per litre range, with the difference between this rate and the official exchange rate representing the “subsidy/FX differential.”

Source: New Telegraph