Buhari Plans to Spend N305bn on Subsidy in 2019 Budget

petrol Oil
  • Buhari Plans to Spend N305bn on Subsidy in 2019 Budget

President Muhammadu Buhari disclosed on Wednesday that N305 billion has been appropriated for petrol subsidy in the proposed 2019 budget.

The president said this during 2019 budget presentation at a joint session of the National Assembly in Abuja.

“We have earmarked N305 billion equivalent to one billion US dollars for under-recovery by the Nigeria National Petroleum Corporation on Premium Motor Spirit in 2019.”

“Let me take this opportunity to address and clarify the under-recoveries on petrol.”

“In a period of economic challenges where purchasing power is weak, we must reduce some of the burden on Nigerians,” he said.

The administration had withdrawn petrol subsidy in 2016, compelling oil marketers to halt importation of the product. Making NNPC the sole importer.

But because pumping price was capped at N145 per litre against landing and supply cost of N185 per litre, the NNPC has been withdrawing from the Nigeria Liquefied Natural Gas to cover the N40/litre difference.

According to the Group Managing Director, Mr Maikanti Baru, NNPC has spent $1.05 billion or N320 billion on the under-recoveries.

However, the move has drawn the anger of the national assembly, who believes the oil company lack the authority to spend the money without the National Assembly approval.

According to experts, the new subsidy provision in the 2019 budget proposal will put an end to the disagreement between the NNPC and the policymakers on the matter.

President Buhari further said the problem with petrol subsidy was abuse and corruption by oil marketers.

“Today, the government-owned NNPC is the sole importer of PMS, and therefore the under-recovery is from the NNPC trading account.”

“This means the possibility of some oil marketers filing bogus claims is removed.”

“We will continue working to bring it (subsidy) downward to ensure such revenue sources are freed up to meet the developmental needs of our people,” the president said.

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]

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