Nigeria’s petrol subsidy cost state oil firm NNPC Ltd 1.83 trillion naira ($2.41 billion) in the five months through May before the programme was scrapped, a report seen by Reuters showed.

Nigerian President Bola Tinubu, who’s embarking on the country’s biggest reforms in decades to tackle issues including a high debt burden, scrapped the popular but expensive subsidy when he took office last month.

NNPC spent $10 billion on the subsidy last year, making it unable to remit funds to federal accounts.

The NNPC claims it is still owed unpaid subsidy receipts by the government.

“The May 2023 subsidy amounted to 307.4 billion naira, thus the outstanding balance carried forward is 3.74 billion naira as of June 2023,” it said.

Nigeria imports almost all its refined fuel because local refineries were shut due to years of neglect.

NNPC has been the sole importer of petrol using crude swap contracts. Because it lacks cash, it pays a consortia of foreign and local trading firms in crude oil.

The NNPC’s import monopoly is set to end after the industry regulator licensed private firms to start importing petrol from July, the head of the Nigerian Midstream and Downstream Petroleum Regulatory Authority said this month.

REUTERS