Petrol subsidy could gulp N900bn in 2022, says minister
The Minister of Finance, Budget and National Planning, Zainab Ahmed has disclosed that the government would spend N900 billion on petrol subsidy in 2022.
The minister disclosed these at the presentation of the draft for 2022-2024 Medium Term Expenditure Framework and Fiscal Strategy Paper in Abuja on Thursday.
In response to a question posed on petrol subsidy, Ahmed stated that the amount currently spent on subsidizing PMS could be redirected to more productive sectors of the economy such as health, education and infrastructure.
She said, “This is costing us big time. We are spending over N150 billion on subsidy. That means NNPC has to use that amount of money to pay for PMS and distributing it. That is money that the federation account can share.
“This is money that could have been available for education, health and infrastructure, reduce our borrowing, increase the amounts that states and local governments are collecting.
“We are being penny wise pound foolish to think that by giving this subsidy, that citizens are benefitting. But by the end of the day, the citizens are actually the ones that are carrying the brunt of the wealthy.”
She added that there was need to completely remove the subsidy on fuel as the subsidy was only benefiting the rich.
She said, “We are projecting we’ll be paying at least N900 billion subsidy next year.
“Imagine what we could have done with that amount. How many schools you can build, how many health centres. It is not wise; it is not wise because we are hurting our economy.”
A review of the 2022 Federal Government spending showed that the projected subsidy budget of N900 billion is higher than the N261.2 billion budgeted for overhead costs for Government Owned Enterprises; N567.02 billion for pension, gratuities and retirees; and N366.13 billion capital supplementation budget.
It also exceeds the N292.7 billion for sinking fund, N750.03 billion personnel cost for Government Owned Enterprises, and N335 billion overhead cost.