Peter Obi, the standard bearer of the Labour Party (LP) in the 2023 general election, has advocated the need to end the “criminality that is called oil subsidy” in Nigeria. 

Mr Obi, who spoke on Thursday at an event in Abuja, lamented that Nigeria now spends more to pay for subsidy on imported refined products than it earns from crude sales. 

“The money Nigeria is sharing from oil earning is finished! We now spend more today to service debts than we earn from oil!” The presidential hopeful lamented.

“Nigeria now spends more to pay for subsidy on imported refined products than she earns from crude sales! Going forward, we must look for ways to move Nigeria beyond oil. We must end the criminality that is called oil subsidy.”

The subsidy is the underpriced sale of premium motor spirit (PMS), better known as petrol, for which the government has continued to spend a huge amount of its resources.

According to data obtained from the Nigerian National Petroleum Corporation (NNPC), the country’s petrol subsidy payments have over the years, grown by about 349.42 per cent from N350 billion in 2019 to N1.573 trillion in 2021. 

This was further propelled by the rising price of crude oil in the international market and the falling value of the Naira.

In 2020, the cost of subsidising the product was put at N450 billion under President Muhammadu Buhari’s regime. 

The situation is further compounded by the fact that none of Nigeria’s three government-owned refineries is currently operational. 

In November 2021, the Buhari regime promised to remove subsidy by mid-2022 and replaced with N5,000 in monthly payments for up to 40 million people. 

Finance Minister Zainab Ahmed also said petrol subsidies were costing Nigeria up to $7 billion a year noting that the Buhari regime had decided to suspend its removal because the timing was “problematic” amid rising inflation.

Earlier this year, the National Assembly approved the request of Mr Buhari to earmark N4 trillion for petrol subsidy in 2022.