The Nigerian Economic Summit Group (NESG) has expressed concern about an impending fiscal crisis in Nigeria if the federal government continues payment of subsidy on Premium Motor Spirit (PMS), popularly called petrol.
In its report for September 2022, titled, “The State of Nigeria’s Economy,” the NESG lamented the drain on the country’s revenue arising from subsidy payments.
It further observed that Nigeria was not generating revenue from oil in spite of the rise in crude oil prices in 2022.
“Despite an increase in global oil prices, the Federal Government’s actual revenue (N1.63tn for January – April 2022) is short of the pro-rated budget (N3.32tn), while government spending (N4.72tn for January – April 2022) was significantly closer to the budgeted levels (N5.77tn for January -April 2022),” the NESG said.
Payment on petrol subsidy between January and July this year was N2.04 trillion, according to data from the Nigerian National Petroleum Company (NNPC) Limited.
NESG urged the federal government to gradually phase out the fuel subsidy regime with a view to reducing spending as continuing the payment would be “disastrous.”
The group pointed out that even though citizens would feel the negative impacts of the withdrawal, it was in their best interest, adding that the effects would only be felt short term.
