Nigeria’s petrol subsidy cost state oil firm NNPC Ltd. N1.83 trillion or about $2.41 billion in the five months through May before the program was scrapped, a report seen by Reuters showed.
President Bola Tinubu, who’s embarking on the country’s biggest reforms in decades to tackle issues including a high debt burden, scrapped the popular but expensive subsidy when he took office last month.
The NNPC spent $10 billion on the subsidy last year, making it unable to remit funds to federation accounts.
The NNPC claims it is still owed unpaid subsidy receipts by the government.
“The May 2023 subsidy amounted to N307.4 billion, so the outstanding balance carried forward is N3.74 billion as of June 2023,” it said.
Nigeria imports almost all its refined fuel because local refineries were shut down due to years of neglect.
NNPC has been the sole importer of petrol using crude swap contracts. Because it lacks cash, it pays a consortium of foreign and local trading firms for crude oil.
The NNPC’s import monopoly is set to end after the industry regulator licensed private firms to start importing petrol in July, the head of the Nigerian Midstream and Downstream Petroleum Regulatory Authority said this month.