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Wale Edun, the Minister of Finance, has lifted the lid on Nigeria’s fuel importation crisis, revealing a monthly expenditure of $600 million that’s draining the nation’s resources and demanding innovative solutions to break the cycle of dependence.
Edun pointed to a surprising culprit behind Nigeria’s soaring fuel import costs: the country’s neighbors, who are helping themselves to its fuel supplies, with some even coming from as far as Central Africa, leaving Nigeria to foot a staggering $600 million monthly bill.
On Wednesday, AIT’s Moneyline programme featured an exclusive interview with Finance Minister Wale Edun, which was uploaded to the station’s YouTube channel, where he shared insights into Nigeria’s fuel import challenges, including the eye-watering $600 million monthly bill.
Edun revealed that the decision to scrap fuel subsidies was motivated by the lack of transparency in domestic fuel usage, making it impossible to determine the actual amount of fuel consumed internally, a situation that had driven up costs and necessitated President Tinubu’s intervention.
According to the National Bureau of Statistics, the removal of fuel subsidies by President Tinubu on May 29 last year has led to a substantial reduction in petrol imports, averaging one billion litres per month, a clear indication of the policy’s impact.
He said, “The fuel subsidy was removed May 29, 2023, by Mr President, and at that time, the poorest of 40 per cent was only getting four per cent of the value, and basically, they were not benefitting at all. So it was going to be just a few.
“Another point that I think is important is that nobody knows the consumption in Nigeria of petroleum. We know we spend $600m to import fuel every month but the issue here is that all the neighbouring countries are benefitting.
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“So we are buying not for just for Nigeria, we are buying for countries to the east, almost as far as Central Africa. We are buying. We are buying for countries to the North and we are buying for countries to the West. And so we have to ask ourselves as Nigerians, how long do we want to do that for and that is the key issue regarding the issue of petroleum pricing.”
He added that the nation must take a decisive step to tackle step the problem as it impedes it’s economic growth.
The Minister highlighted the government’s dedication to safeguarding the welfare of its people, with a special emphasis on supporting the vulnerable, who are often the most affected by economic challenges.
The government is intently focused on addressing food security, working to ensure that all citizens have reliable access to nutritious and affordable food, a cornerstone of economic and social stability.
The Finance Minister shed more light on the N570 billion fund release to state governments, revealing that the program was rolled out in December 2023, as part of efforts to support subnational economies.
He said, “This actually refers to a reimbursement that they received from December last year onwards and it was a reimbursement I think under the COVID financing protocol but the point is that the states have received more money. They have received more money. Mr President has charged to ensure food production in the states.”
Edun dispelled concerns that the Federal Government is becoming overly dependent on Central Bank financing, clarifying that the recent decision to raise the borrowing limit from five to 10 percent is merely a precautionary measure to ensure fiscal flexibility.
