The Federal Government has targeted a total budget of N3tn to meet the funding provisions of the incremental fuel subsidy request in the 2022 budget, finance minister disclosed.
This was announced on Wednesday by the Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed, while addressing State House reporters after the Federal Executive Council (FEC) meeting at the Presidential Villa, Abuja.
She said FEC also approved a proposed amendment to the 2022 budget.
According to her, only N443bn had been provided for in the 2022 budget meant to accommodate subsidy from January to June, but taking the prevailing economic realities, both locally and globally, into consideration, the Council proposed a year-long provision for the subsidy.
Ahmed stated that the request was considered by the Council, which directed the ministry to approach the National Assembly for an amendment to the fiscal framework, as well as the budget.
She said, “We also presented to Council today a request for consideration to make additional funding provisions to enable us to meet incremental fuel subsidy request in the 2022 budget. You will recall that in the 2022 budget, as appropriated, we have made a provision of N443bn for a subsidy for January to June.
“Having taken into account the current realities: increased hardship in the population, heightened inflation, and also that the measures that needed to be taken to enable a smoother exit from the fuel subsidy are not yet in place, it was agreed by Council that it is desirable to exit fuel subsidy.
“The Nigerian National Petroleum Company (NNPC) has presented to the ministry a request of N3tn as fuel subsidy for 2022. What this means is that we have to make an incremental provision of N2.557tn to be able to meet the subsidy requirement, which is averaging about N270bn per month.
“In 2021, the actual under-recovery that has been charged to the Federation was N1.2tn, which means an average of N100bn; but in 2022, because of the increased crude oil price per barrel in the global market, now at $80 per barrel, and also because an NNPC’s assessment is that the country is consuming 65.7 million litres per day, now we’ll end up with the incremental cost of N3tn in 2022.”
The Finance minister added that the request had been considered by FEC and was directed to approach the National Assembly for an amendment to the fiscal framework as well as the budget.
According to her, the approved amendment to be transmitted to the National Assembly will request to repeal clauses 10 and 11 concerning the Economic and Financial Crimes Commission (EFCC) and the Nigerian Financial Intelligence Unit (NFIU) operations in the 2022 budget, as well as restore what the lawmakers had deleted, which amounts to N103bn.