Nigeria cannot pay for imported petrol with only revenue generated from oil and gas.
This is due to shortfalls in the country’s oil production.
Minister of finance, budget and national planning, Zainab Ahmed, stated this in an interview with Reuters on the sidelines of the World Economic Forum (WEF) in Davos.
The minister however said the federal government was hopeful of increasing production to at least 1.6 million barrels per day (bpd) this year.
“We are not seeing the revenues that we had planned for. When the production is low it means we’re … barely able to cover the volumes that are required for the (petrol) that we need to import,” Ahmed said.
The federal government had budgeted 1.8 million bpd of production, but incessant crude theft and attacks on pipelines continue to affect output.
In the first quarter of 2022, Nigeria’s oil production averaged 1.5 million bpd.
In the last four months, Nigeria has spent nearly N1 trillion to pay for petrol import shortfall and will spend up to N4 trillion by the end of the year. This has also dwindled the federation revenue — just as the Nigerian National Petroleum Company (NNPC) Limited have been unable to remit any amount to the government purse this year.
Last month, the federal government asked the National Assembly to drop the projected production volume to 1.60 million barrels per day.
Nigeria has not been able to make any gains from higher oil prices due to the Russia-Ukraine war, as petrol subsidy continues to erode gains.
