Ogasabi on 9am news brings to you breaking news on the financial strains faced by Nigeria due to fuel import expenses. According to the Nigerian National Petroleum Company Limited (NNPCL), the Federal Government’s fuel import expenses in 2023 resulted in a staggering under-recovery and energy security expenses totaling N5.1 trillion. This figure highlights the significant financial burden on the country due to petroleum imports.
The NNPCL disclosed that the total fuel import expenses for 2023 amounted to N9.38 trillion, a sharp increase of 76.7% from the N2.18 trillion recorded in 2022. This substantial rise is attributed to various factors, including the government’s decision to regulate fuel prices, which led to significant under-recovery costs.
In its financial statement for the year ending December 31, 2023, NNPCL categorized N6.25 trillion under domestic crude oil supply and N3.14 trillion under other receivables. These receivables, essentially accounts receivable, represent amounts owed by the government for fuel imports but not yet paid.
NNPCL Financial Strain
This financial strain has sparked criticism from experts and industry insiders. Petroleum engineer and analyst Bala Zakka labeled the term “under-recovery” as a technical jargon used to obscure the actual financial impact on Nigerians. Similarly, former Executive Secretary of the Nigeria Extractive Industries Transparency Initiative, Waiziri Adio, urged NNPCL to be transparent and avoid using misleading terminology. He criticized the company for downplaying the reality of the situation by referring to the expenses as “shortfall” instead of acknowledging them as subsidies.
Despite President Bola Tinubu’s announcement of fuel subsidy removal during his inaugural address on May 29, 2023, there are strong indications that the government continues to spend billions on subsidies, contradicting official denials. Former President Olusegun Obasanjo also weighed in, criticizing the removal of the subsidy without adequate preparations to mitigate its impact on Nigerians.
The ongoing economic hardship has led to widespread protests, with many Nigerians demanding the reinstatement of fuel subsidies. However, President Tinubu has ruled out any return to subsidies, describing the decision as necessary despite its painful consequences.
Stay informed with 9am News Nigeria as we continue to cover this developing story. Ogasabi will keep you updated on the latest developments in this ongoing financial saga.
