The Nigerian government spends an average of $43.8 million daily on petrol subsidies despite expending 118% of its revenue on debt servicing.
Finance Minister Zainab Ahmed told federal lawmakers that $15.9 billion will be spent on petrol subsidies in 2023.
The fund Nigeria spends on petrol subsidy is over a third of its current 2022 budget. It is also the highest single component in its medium-term budget, surpassing the funds earmarked for education, health, security and infrastructure.
Although Nigeria is the largest producer of crude oil in Africa, it imports all its petrol because of the absence of functional refineries.
Petrol is currently being sold for about $0.3 per litre. According to the finance minister, $0.67 is spent on subsidising each litre of petrol.
Both the World Bank and the IMF are against the payment of the subsidy, describing it as unsustainable and counter-productive.