The Politics of fuel subsidy.

Fuel subsidy payment incurred by the Nigerian National Petroleum Corporation, NNPC, rose by N9.94 billion to N16.785 billion in less than one month.

This was allegedly to ensure that the price of Premium Motor Spirit, also known as petrol, did not rise above the official rate of N145 per litre.

It was obtained from the NNPC Monthly Financial and Operations Report for November 2017, showing that the subsidy payment for November represented an increase of 145.08 per cent from N6.849 billion paid in October 2017.

The amount expended by the NNPC on subsidy was the second highest amount since subsidy on fuel returned in 2017, after the N36.27 billion paid by the NNPC in January 2017. To this end, the report stated that the NNPC has spent a total of N128.855 billion on fuel subsidy payments between January and November 2017.

Sebi, Uncle Buhari said he doesn't know about any subsidy and that fuel subsidy would not even be an issue when he comes into Government. Every new Government comes in and immediately increase the pms rate.

I wrote in my undergraduate project how that fuel subsidy is political and is being distributed amongst the cabals within the oil sector.

Fuel scarcity is still a present day reality and many traders still sell at ridiculously high rates.

FG claims that hike in fuel price is not because of fuel subsidy removal

On Monday, the Federal Government increased the price of petrol from the initial N97 to N147. Even though this didn't go down well with many Nigerians, it made fuel available and it was believed that the Federal Government removed subsidy.

The Minister of Information and Culture, Alhaji Lai Mohammed, speaking at a news conference in Abuja, justified the increase in the price of petrol to N145.

He also faulted a claim that the new price regime was about removal of subsidy. He further debunked the claim.

Read what he said below:

“We have no choice but to liberalise the price of petrol if we are to end the crippling fuel scarcity that has enveloped the country, ensure the availability of the product and end the suffering of our people over the lingering scarcity.”

“There is no subsidy to remove because no provision was made for subsidy in the 2016 budget. Last year, the government paid out N1tn in subsidy, and that’s one sixth of this year’s budget. We can’t afford to pay another N1tn in subsidy.”

Justifying the government’s action, he said the fall in the price of crude oil had led to the reduction of foreign exchange available in the country.

This, he explained, had forced marketers to stop the importation of the product, thus making the Nigerian National Petroleum Corporation the supplier of over 90 per cent of petrol.