Fuel Subsidy Payments Based On estimates, Actual Consumption Data Unknown, NEITI Insists

By Gift Eguavoen

The Nigeria Extractive Industry Transparency Initiative (NEITI) has insisted that it remains of the view that the actual data of petrol consumption in Nigeria is unknown and that subsidy payments are based on estimates.

A statement released by the agency on Tuesday and signed by its Head, Communications and Stakeholders Management, Obiageli Onuorah, said “NEITI’s view remains that the data on the country’s actual (fuel) consumption is unknown resulting in huge revenue losses to the nation through subsidy payments based on estimates.”

Consequently, NEITI says while the details of the implementation of the federal government’s policy on end of fuel subsidy regime are being awaited, it is set to commission a special research on the actual consumption of petrol in Nigeria. “The study is to establish precisely what the nation is consuming,” the statement said.

NEITI added that it particularly welcomed President Bola Tinubu’s position that the revenues saved from subsidy be channeled to education, health, roads and other critical infrastructure.

NEITI further noted that a policy advisory it released in 2022 based on a survey it conducted on the pump price of petrol across the country showed that petrol sold above the government approved price nationwide during the era of petroleum subsidy.

According to the survey, in the North West, North East and North Central states a litre of petrol averaged N270.00, N265.80 and N 269.00 respectively. The southern states paid slightly lower with the South-South paying N232.50, South East N235.20k while the South West states paid an average of N250.00. It was only at major marketers’ stations and State capitals that prices were found largely between N169.90 to N190.00.

NEITI’s study on petroleum subsidy also established the prices of petroleum products across Nigeria’s borders and within the West and East African region. In Senegal, a litre of fuel sells for 635.91k, while in Guinea, Sierra-Leone, Togo, Cameroun and the Republic of Benin it costs N609.30k, N506.96K, N 497.78K, N449.24 and N462.23k respectively. “It is on record that the supply to some of these Nigerian neighbours is largely the smuggled subsidized petroleum products from Nigeria,” the Policy Advisory stated.

NEITI says its position which is based on the data in its independent reports has also been strengthened by similar empirical studies and recommendations by reputable international organisations such as the World Bank and the Extractive Industries Transparency Initiative (EITI).

Given the present policy direction of the government, NEITI has called on the regulatory institutions to stand firm and tackle artificial scarcity, hoarding and other man-made obstacles being created at the moment to frustrate the implementation of subsidy removal.

“With its removal, subsidy payments for petroleum products with its attendant insecurity in the country, due to smuggling among others, will be reduced,” the agency added in the statement.

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