Premium News
A review of the Nigerian National Petroleum Company Limited (NNPCL) financial statement for the year ended December 2024 has shown that a sum of N7.1 trillion was said to have been spent on fuel subsidy to defray energy costs.
The expense was tagged “energy security expense” in the financial report.
According to the document, the energy security expense occurs “when there is differential between exchange rate used to freeze the Premium Motor Spirit ex-coastal price and the prevailing exchange rate at point of import settlement.”
“The amount is charged against what should have been paid to the federation accounts monthly.”
A sum of N4.8trillion was recorded to have been spent on the same item in 2023.
This development comes despite the President Bola Tinubu-led Nigerian government’s repeated claims that it has stopped subsidising the cost of petroleum in the country.
Data by the Nigeria Extractive Industry Transparency Initiative (NEITI) shows that the highest amount spent on subsidy by the Nigerian government between 2005 and 2021 was incurred in 2011, when a sum of N2.1 trillion was paid.
In 2022, however, the Nigerian government paid N3.36 trillion as fuel subsidies, meaning that between 2005 and 2022, the highest subsidy paid stood at N3.36 trillion. With N4.8 trillion spent in 2023, the N7.1 trillion recorded for 2024 becomes the highest ever spent between 2005 and 2024, a twenty-year period.
Upon assuming office on May 29, 2023, President Bola Tinubu announced the removal of subsidy, citing the need to stop wastage in governance and increase revenue for development.
It remains unclear why the government incurred even higher subsidy-related expenses after the announced removal.
