Nigeria Extractive Industries Transparency Initiative, NEITI, has said that the Federal Government must end the costly policy of petrol subsidy as the N13 trillion spent on it between 2005 to 2021 was more than the entire budget for health, education, agriculture and defence in the past five years.
Executive Secretary of NEITI, Dr. Orji Orji disclosed this, yesterday, in Abuja at a dialogue organised by Policy Alert.
Orji explained that Nigeria has over the years paid huge costs for the continuing subsidy on petrol, stressing that the country has spent more on the subsidy than capital projects in the past 10 years.
He said: “First is the urgent need to make a decision on the agitation for the removal of fuel subsidies. The full deregulation of the petroleum sector will permanently lay to rest the conversation around oil swaps. NEITI’s latest policy brief entitled “The cost of fuel subsidy: A case for policy review revealed that Nigeria expended over N13 trillion ($74 billion) on fuel subsidies between 2005 and 2021.
The figure in relative terms is equivalent to Nigeria’s entire budget for health, education, agriculture, and defence in the last five years, and almost the capital expenditure for 10 years between 2011-2020.
“It is also important to note other economic opportunity costs of fuel subsidy, include among others slashing allocations for the health, education, and technology infrastructure sectors; deterioration of the downstream sector with the declining performance of Nigeria’s refineries and recording zero production in 2020; disincentivised private sector investment in the down and midstream petroleum sector; low employment generation since the refining process is done outside the shores of Nigeria; worsening national debt; declining balance of payment, forex pressures and depreciation of the Naira and of course product losses, inefficient supply arrangements-scarcity and its attendant queues etc.”
Source:Vanguard
