A World Bank report called the “Nigeria Biannual Economic Update” for 2018, which was released on Monday disclosed that Nigeria spent N731 billion to subsidise petrol consumption in the year under review.
The report, which is a product of the staff of the World Bank and tells of key developments in Nigeria’s economy in the recent past, summarises the staff’s assessment of likely economic outcomes in the short-to-medium term, given the policy developments; as well as highlights key short-term risks in the country
It explained that within the year under consideration, Nigeria’s oil sector declined in its productivity, ending on 1.9 million barrels a day (mbd) production mark as against the government’s hope of 2.3mbd.
Additionally, it stated that the Excess Crude Account (ECA), which provides the country some fiscal buffer, was virtually depleted even though prices of Nigeria’s Bonny Light blend was averagely $21 per barrel more than the oil price that was or budgeted for in the year.
The World Bank had in November 2018 stated in another report titled: ‘Nigeria Bi-annual Economic Update for Fall 2018,’ that petrol subsidy deductions for 2017 full year was N107.3 billion, but its current report showed that N731 billion was spent in 2018 alone.
According to it, most of the petrol volumes Nigeria spent money to subsidise in 2018 were inflated as daily consumption rose to 54 million litres per day (ml/d) from 40ml/d in 2017, ostensibly due partly to out-smuggling.
“Oil and gas revenue collection increased in 2018 but remained below potential. Net oil and gas revenues retained in the federation account grew by 73 per cent in nominal terms: as oil production remained stable, the increase has been driven by the oil price.