Home News Petrol subsidy depletes NNPC contribution to FAAC by 44%

Petrol subsidy depletes NNPC contribution to FAAC by 44%

by Our Reporter
A whooping N621.55 billion has been deducted from the Federation Accounts Allocation Committee, FAAC, funds by the Nigerian National Petroleum Corporation, NNPC, as petrol subsidy in the first half of 2021, H1’21, latest data have shown.

The figure for subsidy amounted to about 43.97 percent of the N1.413 trillion gross revenue from the sale of Nigeria’s oil and gas by the Corporation.

According to the data provided by the NNPC to FAAC, the subsidy payments which are classified as ‘value shortfall’ in its books, showed that N25.37 billion petrol subsidy was deducted from its contribution to Federation Accounts in January, 2021.

Indicating a steady month-on-month rise in petrol subsidy cost, NNPC data also showed that petrol subsidy for the month of February was N73.13 billion while N111.97 billion was recorded in March. April subsidy deduction amounted to N126.30 billion, May was N114.34 billion while the June figure was N170.44 billion.

Public Finance according to our check showed that the N621.55 billion spent on petrol subsidy in the first six months of the year is higher than the entire 2021 Federal budget for the health sector, N546.05 billion.

At the H1’21 figures the subsidy cost has already significantly outstripped the 2021 full year budget Federal budget for healthcare by 13.8 percent. It has also far outstripped Works and Housing (at N399.7 billion) by 55.6 percent and Education (at N226.2 billion) by 174.8 percent.

Speaking on the development, President of Nigerian Association of Energy Economics, Prof. Yinka Omorogbe, said petrol subsidy payment remains a waste to the Nigerian people and the rich were main beneficiaries.

She pointed out that as long as the price of the product remains cheaper in Nigeria, the country would continue to subsidize petrol consumption across the West African sub-region.

“The situation is like this because we are subsidizing everybody,” she added.

You may also like