Fuel Subsidy Is Estimated At N6.72tn For 2023 – Finance Minister

• Subsidy or under-recovery is the underpriced sales of premium motor spirit (PMS), better known as petrol

• The Minister said subsidy payment projection is based on two prevailing scenarios — business-as-usual or reform

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EKO HOT BLOG reports that the Federal Government on Thursday projected to spend N6.7 trillion on petrol subsidy payments in 2023.

Subsidy or under-recovery is the underpriced sales of premium motor spirit (PMS), better known as petrol.

Speaking at the presentation of the 2023-2035 Medium Term Expenditure Framework & Fiscal Strategy Paper (MTEF&FSP) in Abuja, the Minister of Finance, Budget and National Planning, Zainab Ahmed, said subsidy payment projection is based on two prevailing scenarios — business-as-usual or reform.

“Scenario 1 is the Business-as-Usual. This is assuming that the subsidy on PMS, which is estimated at N6.72 trillion for the full year 2023, will remain and be fully provided for,” she said.

“Scenario 2 – the Reform scenario: This assumes that petrol subsidy will remain up to mid-2023 based on the 18-month extension announced early 2021, in which case only N3.36 trillion will be provided for.”

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She, however, said both scenarios have implications for net accretion to the federation account and projected deficit levels.

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