FG Spends $600m monthly on petrol importation – Wale Edun

Wale Edun, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, revealed that the country currently spends $600 million monthly on petrol imports.

He made this statement during an interview on AIT’s Moneyline program on Tuesday.

Edun emphasized that there is no petrol subsidy included in the 2024 budget. He noted that the fuel subsidy was removed on May 29, 2023, and at that time, the poorest 40% of Nigerians were receiving only 4% of the subsidy’s benefits.

He highlighted the issue of unknown petrol consumption levels in Nigeria, noting that the country’s importation also serves neighboring nations, stretching to Central Africa. Edun stressed the need for Nigeria to reassess this practice as it affects national economic growth.

On the topic of food security, Edun explained that the government’s priority is to ensure food availability and affordability. He stated that the recent suspension of import duties and taxes on food commodities will not harm local farmers, as imports will only be allowed after local supplies have been exhausted.

These measures are intended to reduce inflation, stabilize exchange rates, and lower interest rates, creating a better environment for investment and job creation. Edun expressed optimism that lower inflation would lead to a stable exchange rate and reduced interest rates, benefiting the economy.

Regarding the recent N570 billion disbursed to state governments, Edun clarified that it was a reimbursement under the COVID financing protocol and noted that states have received additional funds.

He also discussed the introduction of a 70% windfall tax on the banking sector, stating that this tax aims to redistribute unearned income and is a common practice globally in sectors like energy and banking.

Finally, Edun addressed the increase in the maximum borrowing percentage for Ways and Means advances from 5% to 10%, describing it as a precautionary measure rather than an indication of reliance on Central Bank of Nigeria (CBN) financing.

He assured that the government is primarily using market instruments to manage its debts and maintain economic stability.