The rot and corruption in Nigeria’s oil and gas sector have begun to toll on the economy of the West Africa economic giant with oil subsidy wiping out all earnings from oil and gas activities in the last five months.

Nigeria National Petroleum Company, NNPC, is the manager of the nation’s oil and gas sector but it has been hamstrung by corruption and opacity of operations with 80 percent of Nigeria’s crude oil said to be stolen.

A document sent by the NNPC to the Nigerian government has raised the red flag, showing that the country spent N1.274 trillion, about $3 billion on fuel subsidies in the first five months of this year. Reuters report that the NNPC document showed that NNPC has not remitted any revenue from its oil and gas activities to the Nigerian government between January and May this year.

Nigeria exports crude oil and imports refined petrol, suffering intermittent fuel shortages. The awkward arrangement means that Nigeria contributes almost zero in the oil and gas value chain. With oil prices going up in the international market, it is costing Nigeria more to import and distribute refined products including fuel.

Prior to his victory at the poll in 2014, President Muhammadu Buhari had insisted that there was nothing  like fuel subsidy.

Petrol prices in Nigeria are among the lowest in world as the government pays to keep pump prices fixed despite rising global oil prices.

A plan to abolish the subsidy was scrapped until after national elections in February 2023 and $9.6 billion was added to planned spending to cover it, putting pressure on the budget.

Nigeria faces double-digit inflation and low growth, amid a shrinking labour market and mounting insecurity.

Finance Minister Zainab Ahmed said last month that the country was barely able to cover the cost of imported petrol from its oil and gas revenue.