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FG projects N6.72tn petrol subsidy for 2023, capital projects threatened

Published

4 years ago

July 22, 2022

Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed

The Federal Government is projecting to spend N6.72 trillion on subsidy for Premium Motor Spirit (PMS) otherwise called petrol for the 2023 fiscal year.

The projected expenditure is N2.53trn higher than the current petrol subsidy figure, expected to roll till May next year.

With the amount of subsidy projected, governments at all levels may not get any allocations from oil revenues, which could jeopardise the capital expenditure budget. The situation is also likely to deepen governments’ borrowing spree.

The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, who disclosed the projections at the public presentation of the 2023 – 2025 Medium Term Expenditure Framework and Fiscal Strategic Paper (MTEF and FSP), in Abuja, however, advocated the option of truncating the subsidy payment by May, next year.

She gave two scenarios as to how the 2023 budget will be implemented.

In the first scenario, the minister said, “The subsidy on PMS is estimated at N6.72 trillion for the full year 2023”. This amount, she said, “Will remain and be fully provided for by the NNPC on behalf of the federation”.

This first scenario will leave little or no savings to be shared by the Federal Account Allocation Committee (FAAC) thus limiting the shareable revenue to tax warnings, and royalties. This might impact the health of many states and local governments because of the huge reduction in the monthly FAAC allocations.

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For the second scenario, the minister said: “Petrol subsidy will remain up to mid-2023 based on the 18-month extension announced early 2022, in which case, only N3.36 trillion will be provided for”.

The minister cautioned that “Both scenarios have implications for net accretion to the Federation Account and projected deficit levels”.

She said the government might have a total budgetary estimate of about N17trn for 2022 in one of the scenarios and about N16trn in the other.

The minister noted that “The draft 2023-2025 MTEF/FSP has been prepared against the backdrop of continuing global challenges occasioned by lingering COVID-19 pandemic effects, as well as higher food and fuel prices due to the war in Ukraine”.

On revenue implications, the minister said: “The new arrangement has indicated that NNPC will not be contributing monthly to the Federation as they used to in the past. But NNPC will be paying royalties, dividends and taxes. So, while the revenue might not be monthly, we will work on an arrangement on how this will be paid.

“And it is possible to work out an arrangement where the payments could be monthly or quarterly. So, I was just saying that in a new arrangement regime NNPC will not be contributing to the FAAC on a monthly basis, but NNPC will still be paying taxes, royalties and dividends,” she explained further.

The minister clarified why NNPC has not remitted funds to FAAC for about eight months while it was transiting to NNPC Limited which took effect on Tuesday.

“Why are we not receiving any revenues from the Federation? Because the NNPC has been instructed to cover the cost of fuel subsidy on behalf of the federation. So NNPC is not paying the subsidy on its account and I mean, they were not paying the subsidies that would have been remittances distribution and this is the arena that we seek to continue in 2023,” she said.

To ward off this looming crisis, Ahmed said subsidy removal remains the best option.

“And that’s why it’s important for us to consider this issue of removal of subsidies very seriously because no marketer is willing to buy PMS after sourcing their foreign exchange and competing with subsidies, it can only be a government agency,” she stated.

Daily Trust reports that President Muhammadu Buhari had at various times suggested his disapproval of withdrawing the fuel subsidy, which he said, would worsen the condition of the poor.

Revenue challenges soar as debts, salaries gulp N4.7trn in 4 months

Meanwhile, the government admitted on Thursday that the country is in severe revenue challenges and must find sustainable strategies to boost revenue and revive the economy.

Ahmed, during the consultative forum, said figures so far have shown that Nigeria spends about 90 per cent of its revenue on debt servicing.

This is further compounded by the rising inflation, which is now 18.60 per cent according to the latest figures from the National Bureau of Statistics (NBS).

The country’s debt service has also worsened in the first quarter of 2022 as the country’s debt service to revenue ratio rose to 80 per cent, implying an increase of 400 basis points when compared to the 76 per cent obtainable last year.

A debt service to revenue ratio of 8 per cent implies that for every N100 earned by Nigeria, N80 is spent servicing debt.

Further checks by Daily Trust show that Nigeria’s total debt stock as at the first quarter of 2022 had risen to N41.60trn against N39.56trn in December 2021, which represents a N2.04trn increase in three months.

The minister said the federal government has so far released the sum of N4.72trn to finance some of the expenditure items contained in the 2022 budget.

The 2022 N17trn budget was signed into law on December 31 last year by President Muhammadu Buhari.

The breakdown of the budget includes N869bn for statutory allocation, N3.8trn for debt servicing, N6.9trn and N5.4trn for recurrent and capital expenditure respectively.

Speaking during the event, Ahmed said “Out of the N4.72trn spending, the government released N1.9trn for debt service while personnel costs and pensions gulped the sum of N1.26trn,”

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She said the balance of N773.63bn was spent by the federal government on capital projects.

On revenue generation, the minister explained that “Between January and April this year, the federal government generated the sum of N1.63trn. Out of the N1.63trn, N285.38bn came from oil revenue, which represents 39 per cent performance, while non-oil revenue collection was put at N632.56bn representing about 84 per cent.”

Corroborating the position of the minister, The Director -General of the Budget Office of the Federation, Ben Akabueze said that Nigeria is currently going through significant fiscal challenges.

Akabueze said while Nigeria had improved transparency and accountability in the oil sector, more work needed to be done in boosting revenue.

Nigeria recorded its best performance in the open market improving by 24 points in transparency in the latest Open Budget Initiative Report.

Despite new petrol price, fuel scarcity returns to Abuja

Even with a price increase for petrol, this week, queues for the product have persisted in Abuja.

Daily Trust observed yesterday that vehicular queues have returned at fuel stations said to be selling cheaper and whose pumps are perceived as accurate.

Last weekend, petrol stations in the capital city jerked up the pump price almost uniformly to N185/litre a development, which cleared the long queues suffered by motorists for weeks.

On Tuesday, some petrol marketers released a new price template, which contains official approval for petrol to sell above N165 per litre across the country. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), which fixes rates, did not confirm or refute the new price regime.

According to the regional price list, the rate rose to N169 in Lagos and N174 for Abuja.

However, there were varied prices for the six geopolitical zones with the South West, South South, southeast and north central regions getting a hike of N14 from N165 to N179/l.

The price was raised to N184 in the North West and N189 in the North East being a N24 increase, the highest in the new adjustment. Petrol will now sell at N179 in the North Central region.

The upward price review also affected ex-depot prices in the Lagos axis, rising from N148.17 to a range of N160 and 162. Depots in Warri/Ogbarra have their rates adjusted to N162-N165 while Port Harcourt depots will sell for N165-167.

However, in spite of this raise, motorists were shocked to see that the queues have sprung up again. According to a cross section of them found along some major stations in the nation’s capital, the resurfacing of the queues was something to worry about.

Hamisu Usman, a mechanic, said he was at a station to buy petrol in the Dutse area of Abuja on Thursday and although he bought the product for N175, he spent two hours in the queue.

In Jabi, some fuel stations sold the product for N175 while others were shut indicating they were yet to receive a fresh consignment of the product. Around the Wuse area, the few stations operating had vehicles besieging both their entrance and exit points.

Just opposite the NNPC Limited headquarters, the stations sold the product for N174/l with a winding queue of vehicles spanning over a kilometre on the Conoil side.

On the cause of the scarcity, a marketer, Samuel Okon, said it was barely 48 hours after the new price template came into effect.

He said, “It will take almost a week for this issue to normalise because the marketers who had stopped buying the product will have to mobilise funds to go to the depots and buy at the new rate knowing that they will get a profit margin.

“So, from next week, some of the stations that were shut earlier will begin to resume operations and that will ease the queues,” noted Okon.

But a pump attendant supervisor in one of the prominent stations in Abuja, Aliyu Musa, gave another view to the rising queue for petrol.

He said this is the first time in years that Nigerians are witnessing separate but ‘official’ prices of petrol and that it will take time for them to adjust.

“You know that the prices in Abuja and Lagos are cheaper than those in all other states and the geopolitical zones. What we have observed among the motorists we serve since Wednesday is that most of them who live in Suleja (Niger State) and Mararaba (Nasarawa) prefer to buy in town because they said stations are selling at N179 there while it is N174 officially in Abuja.”

Musa also said long distance and interstate drivers fill up their vehicles in Abuja rather than buying a little and that was adding to the queue. “If you make your observation in Lagos, you may see this same trend too,” he noted.

DAILY TRUST

Related Topics:Featured FG Petrol subsidy

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Dangote cuts petrol price again as crude oil surge threatens fuel price relief

Published

3 hours ago

July 9, 2026

Trends Admin

Dangote cuts petrol price again as crude oil surge threatens fuel price relief

Dangote Petroleum Refinery has announced another reduction in the ex-depot price of Premium Motor Spirit (PMS), popularly known as petrol, despite renewed pressure in the international oil market caused by a sharp increase in global crude oil prices.

The latest adjustment comes as Nigeria’s downstream petroleum sector records mixed pricing trends, with wholesale petrol prices remaining largely stable across major depots while diesel prices climbed in several locations, particularly in Lagos.

According to the latest depot pricing data released on Wednesday, Dangote Refinery reduced its petrol loading price by ₦1 per litre, bringing the ex-depot price down from ₦1,076 to ₦1,075 per litre.

Although the reduction appears marginal, it reinforces the refinery’s commitment to maintaining competitive pricing in Nigeria’s deregulated downstream petroleum market.

The latest adjustment follows Dangote Refinery’s recent decision to slash its ex-gantry petrol price by ₦50 per litre to ₦1,075, marking its fourth major reduction within one month and bringing cumulative cuts to ₦200 per litre since late May.

The refinery has consistently maintained that its pricing decisions are driven by production economics, inventory costs and operational sustainability rather than short-term movements in international crude oil prices.

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According to the company, a significant portion of the crude currently being refined was purchased when global oil prices were much higher, limiting the extent of immediate reductions despite recent improvements in market conditions.

The refinery has also aligned its coastal loading price with the new ex-gantry rate and expanded fuel sales to all qualified petroleum marketers after ending its previous consortium sales arrangement, a move expected to improve product availability and encourage greater competition across the country.

In another development, MRS Oil Nigeria reduced its wholesale petrol price by ₦2 per litre, lowering its depot price from ₦1,076 to ₦1,074 per litre, making it one of the cheapest suppliers in the Lagos market.

However, other major marketers, including NIPCO, Sahara Energy, Aiteo and African Terminal, retained their previous petrol prices, reflecting relative stability in the wholesale market despite growing competition.

Across Lagos depots, wholesale petrol prices remained within a narrow range of ₦1,074 to ₦1,075 per litre, indicating that marketers are adopting cautious pricing strategies while closely monitoring developments in the global energy market.

Unlike petrol, diesel (Automotive Gas Oil – AGO) recorded widespread price increases across several depots in Lagos.

African Terminal increased its diesel price from ₦1,410 to ₦1,450 per litre, while Duport, Ibachem, Ibeto and T-Time implemented similar ₦40 per litre increases, pushing their depot prices to ₦1,450 per litre.

In contrast, the Port Harcourt market recorded lower diesel prices.

Matrix Depot reduced its AGO price by ₦50 per litre, from ₦1,550 to ₦1,500, while Sigmund trimmed its diesel price from ₦1,463 to ₦1,460 per litre.

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Petrol prices in Port Harcourt remained unchanged, with Matrix maintaining its PMS depot price at ₦1,100 per litre.

In Warri, competition among marketers resulted in slight reductions in petrol prices.

Nepal and Optima each lowered their depot prices by ₦2 per litre to ₦1,083, while Parker reduced its price by ₦1 to ₦1,084 per litre.

Other marketers, including Matrix, Rain Oil, Prudent Energy and A.Y.M. Shafa, maintained their petrol prices at ₦1,085 per litre.

Diesel prices in Warri, however, moved in the opposite direction.

Prudent Energy raised its AGO price by ₦70 per litre, from ₦1,480 to ₦1,550, while A.Y.M. Shafa retained its diesel price at ₦1,435 per litre.

In Calabar, Soroman maintained its petrol price at ₦1,100 per litre, while Fynfield increased its diesel price by ₦30, from ₦1,450 to ₦1,480 per litre.

Meanwhile, developments in the international oil market have raised fresh concerns over the sustainability of recent fuel price reductions.

On Wednesday, the global oil market witnessed a strong rally as renewed geopolitical tensions and concerns over tighter crude supplies pushed prices sharply higher.

The international benchmark Brent crude gained 7.32 per cent to trade at $79.59 per barrel, while West Texas Intermediate (WTI) rose 6.79 per cent to $75.22 per barrel.

Energy analysts say a sustained increase in global crude prices could eventually reverse the downward trend in domestic fuel prices because crude oil accounts for the largest share of refining costs.

Although Nigeria’s growing domestic refining capacity—led by Dangote Refinery—is expected to reduce dependence on imported petroleum products and improve market competition, experts note that exchange rates, international crude oil prices, logistics costs and broader market dynamics will continue to influence fuel prices under the country’s deregulated downstream petroleum regime.

For consumers, transport operators and manufacturers, the latest petrol price adjustment offers modest relief. However, industry observers caution that the direction of future fuel prices will largely depend on developments in the global oil market and the cost of crude available to local refiners.

Dangote cuts petrol price again as crude oil surge threatens fuel price relief

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Dangote launches free petrol delivery in Lagos, Abuja, five other states

Published

20 hours ago

July 8, 2026

Trends Admin

Dangote launches free petrol delivery in Lagos, Abuja, five other states

Dangote Petroleum Refinery has launched a free delivery programme for Premium Motor Spirit (PMS), popularly known as petrol, to customers in Lagos, Ogun, Rivers, Kaduna, Delta states and the Federal Capital Territory (FCT), Abuja, while maintaining its ex-depot price at N1,075 per litre.

The refinery announced the initiative in a notice published on its official X (formerly Twitter) account on Wednesday, describing the programme as part of efforts to improve the distribution of locally refined petrol, reduce logistics costs for marketers and ensure more efficient fuel supply across Nigeria.

According to the company, the free delivery service is available to customers purchasing a minimum of 250,000 litres of petrol. The current rollout covers six strategic locations, with plans to expand the initiative to other parts of the country in subsequent phases.

In addition to free transportation, the refinery introduced a 10-day credit facility for qualified bulk buyers, a move expected to ease cash flow challenges for marketers, improve inventory management and encourage wider distribution of fuel nationwide.

The latest initiative comes days after Dangote Petroleum Refinery held a meeting with stakeholders in Nigeria’s downstream petroleum sector to discuss cost-reflective petrol pricing, supply stability and measures to make fuel more affordable for consumers.

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The meeting ended with marketers and industry operators expressing support for further reductions in petrol prices as local refining capacity continues to improve.

The free delivery programme also follows the refinery’s latest reduction in its ex-depot (gantry) price of petrol from N1,125 to N1,075 per litre, marking the fourth downward price review by the company in recent weeks.

Industry analysts believe the consistent price cuts reflect increasing production capacity at the refinery, improved operational efficiency and growing competition in Nigeria’s deregulated downstream petroleum market.

The refinery has also widened access to its products by allowing all licensed petroleum marketers to purchase directly, ending its previous consortium sales arrangement. The move is expected to promote competition, improve product availability and reduce supply bottlenecks across the country.

By absorbing transportation costs to the six pilot locations, Dangote Petroleum Refinery is expected to lower operational expenses for marketers. Analysts say the savings could translate into lower retail pump prices if passed on to consumers.

Commenting on recent market trends, the President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Abubakar Maigandi, disclosed that the retail price of petrol has dropped by about N125 per litre within the last three weeks.

According to him, pump prices currently range between N1,155 and N1,299 per litre, depending on transportation costs, location and individual marketers’ pricing structures.

Maigandi attributed the reduction to increased local supply from the Dangote Petroleum Refinery, heightened competition among marketers and the refinery’s successive reductions in ex-depot prices.

Industry experts believe the combination of lower gantry prices, free product delivery and easier access to supplies for marketers could further stabilise Nigeria’s fuel market, improve nationwide availability of petrol and moderate pump prices in the coming weeks.

The development represents another milestone for Dangote Petroleum Refinery as it expands its influence in Nigeria’s energy sector through increased domestic refining, improved fuel distribution and market-driven pricing strategies aimed at reducing the country’s dependence on imported petroleum products.

If successfully implemented on a wider scale, the initiative is expected to enhance fuel supply efficiency, strengthen competition in the downstream petroleum sector and deliver cost savings that could ultimately benefit millions of Nigerian motorists and businesses.

Dangote launches free petrol delivery in Lagos, Abuja, five other states

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Winpart by CFAO, CFAO Solidarity Advance Child Welfare Through Bethesda Foundation Initiative

Published

2 days ago

July 7, 2026

Trends Admin

L-R: Director of Operations and Pastoral Care, Bethesda Child Support foundation, Mrs Lanre Abu: representative of the founder, Bethesda Child Support foundation; Barrister Olamide Adeleye; General Manager, Winpart by CFAO, Mr. Eric Fantodji; and Deputy Managing Director, CFAO Mobility, Mr Kunle Jaiyesimi, at the presentation of Financial support from CFAO Solidarity and Winpart by CFAO to Bethesda Child Support Foundation in Lagos recently

Winpart by CFAO, CFAO Solidarity Advance Child Welfare Through Bethesda Foundation Initiative

Winpart by CFAO, in collaboration with CFAO Solidarity, has reinforced its commitment to community development and social impact by supporting the Bethesda Child Support Foundation, a gesture aimed at expanding care, education and empowerment opportunities for vulnerable children while strengthening sustainable development initiatives across the communities where the CFAO Group operates.

The donation forms part of a broader corporate social responsibility initiative designed to support organisations making measurable differences in the lives of disadvantaged people.

Through the intervention, CFAO Solidarity and Winpart by CFAO presented €7,000 and ₦1 million to the Foundation to bolster its programmes focused on child care, protection, education and holistic development.

Speaking during the presentation ceremony, the Deputy Managing Director of CFAO Mobility Nigeria, Kunle Jaiyesimi, said the company believes business growth must be accompanied by meaningful contributions to society.

“At CFAO, we believe that business success must go hand in hand with social responsibility. Our support for the Bethesda Child Support Foundation reflects our commitment to backing initiatives that create meaningful and lasting impact in the lives of children and communities,” he said.

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Jaiyesimi noted that the intervention aligns with the company’s broader vision of promoting sustainable community development through strategic partnerships with organisations delivering tangible social impact.

The project is one of several initiatives selected and funded by CFAO Solidarity, the Group’s employee-led solidarity programme, which supports impactful community projects across the countries and communities where CFAO operates. Working with credible partner organisations, the programme seeks to improve the lives of vulnerable populations while driving positive and lasting social change.

Also speaking at the event, the General Manager of Winpart by CFAO, Eric Fantodji, said the company was proud to support an organisation dedicated to giving vulnerable children hope and opportunities for a better future.

“The work being done by the Bethesda Child Support Foundation is truly inspiring. We are honoured to support a cause that provides care, hope and opportunities to children who deserve the chance to build brighter futures. Through CFAO Solidarity, we are proud to be part of a wider movement supporting impactful community projects across our areas of operation,” he said.

Receiving the donation on behalf of the Foundation, Olamide Adeleye expressed gratitude to Winpart by CFAO and CFAO Solidarity, describing the support as a significant boost to the Foundation’s mission.

“We are deeply grateful to Winpart by CFAO and CFAO Solidarity for their generosity and belief in our mission. This support will contribute significantly to the welfare, development, and empowerment of the children under our care,” she said.

The initiative further underscores CFAO’s commitment to sustainable development and community engagement, highlighting the value of partnerships between the private sector and social institutions in creating lasting benefits for vulnerable communities.

Through interventions such as this, CFAO Mobility Nigeria and CFAO Solidarity continue to strengthen their commitment to building resilient communities, supporting vulnerable groups and advancing inclusive, sustainable development across the regions where the CFAO Group operates.