Governors of the 36 states in Nigeria have expressed displeasure over continuation of fuel subsidy payment on premium motor spirit also known as petrol, saying it is no longer sustainable.
They said the fuel subsidy, which is being paid by the Nigerian National Petroleum Corporation (NNPC), is draining the country’s resources, Leadership reports. Legit.ng gathers the governors made their position known through the chairman of the Nigeria Governors’ Forum (NGF), Governor Kayode Fayemi of Ekiti state.
Kayode spoke in Abuja on Wednesday, July 10, when he led a delegation to visit the new NNPC’s group managing director (GMD), Mele Kyari, at the corporation’s headquarters.
He said: “It is important to highlight that subsidy remains a major drawback on government revenues. We may need to consider a new deal on how government will absorb the cost of subsidy.
“This has become necessary given the new reality of low oil revenues and rising government commitments. We believe that at the current course, subsidy costs will continue to offset any recovery in the oil market. The country recorded one of its lowest costs of subsidy in 2016 when oil traded at an average of $48.11 per barrel. Total subsidy that year was around N28.6 billion; but the amount rose to N219 billion in 2017 and N345.5 billion by mid-2018, as the price of oil and domestic PMS consumption rebounded. These are important considerations for us, with direct implications on energy security and economic stability in the country.”