Business, World News

See the Millions of Dollars FG Spend Monthly for Fuel Importation

Published by Tope Fakinlede on August 7th, 2024.

See the Millions of Dollars FG Spend Monthly for Fuel Importation

Wale Edun, Nigeria’s Finance Minister and Coordinating Minister of the Economy, disclosed that the country is currently spending $600 million each month on fuel imports.

During an interview on AIT’s Moneyline program, Edun explained that this substantial expenditure results from neighboring countries and regions as far as Central Africa benefiting from Nigeria’s fuel imports.

The minister noted that this situation contributed to President Bola Tinubu’s decision to remove the fuel subsidy, as the actual domestic fuel consumption remains unclear. According to the National Bureau of Statistics, the removal of the subsidy on May 29, 2023, led to a reduction in petrol imports to an average of one billion liters per month.

Edun remarked, “The fuel subsidy removal on May 29, 2023, was crucial because at that time, the poorest 40% of the population was receiving only 4% of the subsidy’s value. The majority were not benefiting. Furthermore, we are not only buying fuel for Nigeria but also for neighboring countries to the east, north, and west. This raises the question of how long we want to continue this situation, which is a critical issue regarding petroleum pricing.”

He emphasized the need for decisive action to address this issue, noting its impact on economic growth. The government is also focused on the welfare of its citizens, especially the vulnerable, and is prioritizing food availability and affordability.

Edun clarified that the N570 billion allocated to state governments was part of a reimbursement under the COVID financing protocol from December last year. He noted that the states have received increased funding and that President Tinubu is committed to enhancing food production.

Regarding the recent increase in the borrowing limit for Ways and Means from 5% to 10%, Edun clarified that this does not imply a reliance on Central Bank of Nigeria financing. Instead, the government has utilized market instruments to manage its debts.

He explained, “The increase to 10% is a precautionary measure to provide extra flexibility in case of timing mismatches between revenue and expenses. It’s not an indication of relying on central bank funding but a fail-safe to ensure financial stability.”

Edun also reaffirmed the administration’s commitment to prioritizing the welfare of Nigerians, with a focus on ensuring that food is available and affordable. He assured that importation would only occur after exhausting local supplies and that auditors would oversee this process.

These measures aim to reduce inflation, stabilize exchange rates, and lower interest rates to foster a favorable environment for investment and job creation.