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NNPC fails to remit earnings to FAAC due to huge spending on fuel subsidy

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Nigeria spent N1.274 trillion on fuel subsidies in the first five months of this year, a document sent by state oil firm NNPC Limited to the Federation Allocation Account Committee (FAAC) on oil and gas revenue distribution showed on Thursday.

Nigeria exports crude oil and imports refined petrol, suffering intermittent fuel shortages. The subsidy has seen the country raise its deficit forecast twice this year and increased borrowings to cover the cost.

Petrol prices in Nigeria are among the lowest in world as the government pays to keep pump prices fixed despite rising global oil prices.

READ ALSO: Shell suspends sale of its Nigerian $2.3 bln onshore oil assets

The NNPC document showed that the corporation has not remitted any revenue from its oil and gas activities to the FAAC between January and May this year.

A plan to abolish the subsidy was scrapped until after the national elections in February 2023 and N4 trillion was added to planned spending to cover it, putting pressure on the budget.

Nigeria faces double-digit inflation and low growth, amid a shrinking labour market and mounting insecurity.

Finance Minister Zainab Ahmed said last month that the country was barely able to cover the cost of imported petrol from its oil and gas revenue.

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