Babajide Okeowo
In a shocking report, PricewaterhouseCoopers (PwC), a global accounting and consulting firm, has revealed that the Federal Government of Nigeria spent about N2.3 trillion, as subsidies on petrol and power consumption between 2015 and 2018.
The report has it that the President Muhammadu Buhari-led administration spent N1.2 trillion on petrol subsidy within three years while N1.12 trillion was spent as subsidy on electricity within the same timeframe.
Presenting the report to power sector stakeholders at a roundtable organised by Mainstream Energy Solutions-operators of the Kainji and Jebba hydropower generation companies (Gencos), the Chief Economist of PwC Nigeria, Dr. Andrew Nevin, revealed that the total electricity subsidy for the period alone could cover the current budget of the ministries of health and education.
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“The Federal Government has expended about N1.2 trillion as petroleum subsidy over the past four years (2015-2018). The tariff shortfall in the electricity sector which technically is the electricity subsidy payable by the federal government stood at N1.12 trillion between 2015 and 2018. Both subsidies amount to N2.3 trillion, which represents about 17 percent of current foreign reserves and 26 percent of the 2019 budget” he revealed.
Recall that the issue of fuel subsidy has been in the front burner of national discourse with the International Monetary Fund (IMF) reiterating the need for Nigeria and other countries that still retain the policy of subsiding fuel consumption to put an end to the policy.
The IMF had posited in a blog post titled “Fuel for Thought: Ditch the Subsidies”, that the fuel subsidy which some countries pay as an attempt to reduce the price of fuel for consumers, typically benefits the rich more than the poor.
