NNPCL will continue funding fuel subsidy ― Finance Minister

The Nigerian National Petroleum Company Limited (NNPCL) would continue to fund the N4.19 trillion fuel subsidies for the 2022 fiscal year on behalf of the Federation despite being a commercial venture, and its stand of no longer remitting any money to the Federation Accounts Allocation Committee for sharing to the three tiers of government monthly.

The fuel subsidy burden on the NNPCL that is being saddled with the responsibility of settling the bill would increase to about N6.72 trillion for the full year 2023 if the subsidy regime still remains and be fully provided for in the budget.

This was disclosed by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, at the public consultation on the draft 2023 – 2025 Medium Term Fiscal Framework/Fiscal Strategy Paper (MTFF/FSP), on Thursday, in Abuja.

Giving an overview of the 2023-2025 Medium Term Revenue Framework (MTRF) on oil and gas revenues and Federally Funded Upstream for the period under review, Mrs Ahmed said two scenarios were opened for consideration.

“The projected fiscal outcomes in the medium term are presented under two scenarios based on the underlying budget parameters/assumptions, as follows: 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”, MrsAhmed stated.

Additionally, she said there will be tighter enforcement of the performance management framework for Government Owned Enterprises (GOEs) that will significantly increase operating surplus/dividend remittances in 2023.

However, the Minister for Finance, Budget and National Planning warned that both scenarios have implications for net accretion to the Federation Account and projected deficit levels.

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