This is according to the Fuel Pump Price Per Litre – Average (PMS) data from the Central Bank of Nigeria.
The Nigerian National Petroleum Corporation became the sole importer of petrol in Nigeria in 2016 after the Federal Government introduced the price modulation mechanism, which saw the pump price of the commodity rise.
A few months after the hike in May 2016, the value of crude oil in the international market soared, while the value of Nigeria’s currency, the naira, slid to almost N500/dollar, from about N197 to the dollar.
The NNPC said that fuel subsidy gulped N306.92bn in 2015.This affected the landing cost of petrol, which rose steeply, and the country not willing to hike the pump price of the commodity again, soon returned to subsidising the product.
In 2021, the NNPC said fuel subsidy gulped N1.43tn, although there was no record for under-recovery in January.
This means that the cost of fuel subsidy rose by 365.92 per cent within the six-year period.
The NNPC called the subsidy payments under-recovery and deducted it from the proceeds of its domestic crude oil sales, before making remittances to the Federation Account.
The President, Major General Muhammadu Buhari (retd.), announced himself as substantive Minister of Petroleum in 2015. Before his regime, Buhari had denied the existence of fuel subsidy, describing it as fraud.
However, as a president, Buhari has failed to address the fuel subsidy crisis, which drains government revenue.
The World Bank and the International Monetary Fund have decried the continued spending by the Nigerian government on the petrol subsidy, urging the government to end the subsidy regime.
However, the Nigeria Labour Congress and other pressure groups and trade unions had threatened nationwide protests against the removal of the fuel subsidy.
Although the Federal Government had planned to eliminate the fuel subsidy by June 2022, the government backtracked on the plan and extended the subsidy regime by 18 months.
The Nigerian Bar Association, amongst others, had described the decision of the All Progressives Congress-led government to suspend its planned petrol subsidy removal as an election strategy.
Also, the NNPC has said a total of N4tn from the Federal Government is required to fund the fuel subsidy in 2022.
Recent figures from the NNPC showed that fuel subsidy gulped N675.93bn in the first quarter of 2022.
According to the oil firm, fuel subsidy gulped N210.38bn, N219.78bn, and N245.77bn in January, February, and March 2022 respectively.
The President’s Special Adviser on Media and Publicity, Femi Adesina, earlier this year said Nigerians will have to pay a price to continue subsidising PMS, adding that the country might be left with no other choice but to continue borrowing to shoulder its fiscal overhead.