Fuel subsidy to gulp n450bn in 2020 ahmed
According to a report by the Nigerian National Petroleum Corporation (NNPC), the fuel subsidy is expected to gulp N450 billion in 2020. This is a significant increase from the N314 billion allocated for fuel subsidy in 2019.
The fuel subsidy is a government program aimed at reducing the cost of fuel for Nigerians by providing a subsidy to oil marketers to sell petroleum products at a lower price than the market rate. However, the program has been plagued by corruption and inefficiencies, leading to widespread abuse and mismanagement of funds.
The increase in the fuel subsidy allocation for 2020 is attributed to several factors, including:
- Increase in global oil prices: The global oil price has increased significantly in recent months, leading to a rise in the cost of importing petroleum products into Nigeria.
- Devaluation of the naira: The devaluation of the naira against the US dollar has increased the cost of importing petroleum products, leading to a higher subsidy bill.
- Increase in domestic refining capacity: The NNPC has increased its domestic refining capacity, which has led to a reduction in the amount of petroleum products imported into the country. However, this has also led to an increase in the cost of refining and distributing petroleum products, which is reflected in the subsidy bill.
The fuel subsidy has been a contentious issue in Nigeria, with many calling for its abolition due to its inefficiencies and corruption. However, the government has continued to maintain the program, citing its importance in reducing the cost of living for Nigerians.
It is worth noting that the fuel subsidy is not a direct benefit to Nigerians, as the savings are not passed on to consumers. Instead, the subsidy is absorbed by oil marketers, who are able to sell petroleum products at a lower price than the market rate. This has led to widespread abuse of the program, with many oil marketers using the subsidy to make profits rather than reducing the cost of fuel for consumers.