Esther Oritse
Lagos — A SaharaReporters analysis of the Nigerian National Petroleum Company Limited (NNPCL) financial statement for the year ended December 2024 has uncovered that the company spent ₦7.1 trillion on what effectively amounts to fuel subsidy payments, despite official denials by the Federal Government.
The amount was categorized in the report under “Energy Security Expense.”
As explained in the statement, the energy security expense arises “when there is a differential between the exchange rate used to freeze the Premium Motor Spirit (PMS) ex-coastal price and the prevailing exchange rate at the 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.
