Nigeria to Pay $2.1 Billion in Subsidies to End Fuel Shortagesby
Nigeria’s government will immediately pay overdue subsidies of 407 billion naira ($2.06 billion) to fuel marketers to end shortages at gasoline pumps, the finance ministry said.
President Muhammadu Buhari directed Finance Minister Kemi Adeosun to pay the subsidies “to bring to a quick end to the lingering fuel crisis which has caused great suffering to Nigerian families and businesses,” Marshall Gundu, an Abuja-based spokesman for the ministry, said in an e-mailed statement on Wednesday.
The payment covers arrears from 2014 and this year and further details will be published in national newspapers, Gundu said.
Pumps ran dry across Nigeria last month after marketers said they needed to be paid the subsidies before they could re-stock. The government caps gasoline prices at 87 naira a liter. Buhari has ruled out scrapping subsidies for now, despite the finances of Africa’s biggest oil producer being ravaged by crude prices falling to around $40 a barrel from $125 around 18 months ago.
Fuel subsidies cost the country $35 billion between 2010 and 2014 and have mainly benefited wealthy Nigerians, who buy more fuel than the poor, the World Bank said in a report on Tuesday.
“The benefits of the fuel subsidy in Nigeria appear quite limited, while the costs are high,” according to the World Bank report.