This was revealed by the Minister of State for Petroleum Resources and Group Managing Director of the Nigerian National Petroleum Corporation, (NNPC), Dr Ibe Kachikwu.
The Minister made the revelation while speaking at the Senate/House of Reps. joint committee on the Medium Term Expenditure Framework (MTEF) and he stated that the subsidy bill was "on the high side".
He further explained that the Federal Government had spent an average of N1trillion per year in the last five years despite infrastructural deficits and increasing debts. Daily Post reports.
The Minister said “The total subsidy figure for 2015 when taken along with the NNPC will be in excess of N1 trillion. We can get this specifics but the point is largely that it does not involve NNPC because the agency takes its off-cuff.
“We will work towards taking those figures off our budget in 2016. They are critical issues. The current pricing work we are doing had shown that there shouldn’t really be subsidy. The government doesn’t need to subsidise.
“There is energy around the removal of subsidy. Most Nigerians we talk to today would say that’s where to go. I have since left the dictionary of subsidy by going to price modulation which is a bit more technical.
“Price of refined products today is N87. It was N97 before it was reduced and we really have to go back to that because we don’t really have the finance to remove it.
“There are lots of safety barometer between the N87 and N97per litre regime between which government does not have to fund subsidy. Yet the prices would be fairly close to what it used to be today. That is the first mechanism we are going to work.” .
Removal of fuel subsidy has been suggested as the most efficient way for the Government to tackle the increasing fuel scarcity issues and also revive the economy. The World bank also advised the Federal Government to enforce it with immediate effects before the country's economy experiences further depreciation.
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