Nigeria to increase fuel subsidy spending for 2023 by N2.7tr

The Federal Government will spend N2.7 trillion more on fuel subsidy payment in 2023.

The Minister of Finance, Budget and National Planning, Zainab Ahmed, who disclosed this during the presentation of the 2023-2035 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF-FSP) on Thursday in Abuja, said the government estimated subsidy payment would gulp N6.7 trillion.

The amount was pegged on the Business-as-Usual scenario, higher than the N3.36 trillion projected for the reform scenario.

However, the government had put the estimated subsidy spending for this year at N4 trillion.

READ ALSO: House of Reps accuses NNPC of padding fuel subsidy cost, diverting $7bn

The rise in the price of crude oil and the ripple effect of the Russia and Ukraine war were believed to have driven the increase in Nigeria’s fuel subsidy payment which the government had planned to remove in January but suspended the decision till June 2023.

Ahmed said: “Scenario 1 – the Business-as-Usual scenario: This assumes that the subsidy on PMS, estimated at N6.72 trillion for the full year 2023, will remain and be fully provided for.

“Scenario 2 – the Reform scenario: This assumes that petrol subsidy will remain up to mid-2023 based on the 18-month extension announced early 2021, in which case only N3.36 trillion will be provided for.”

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