Discrimination, inefficiency, fraud in the fuel subsidy regime


The Nigerian petroleum sector is one of the most poorly administered sectors of the  economy. From crude oil theft, un-metered oil production, gas flares, malfunctioning refineries, corrupt fuel subsidy regime, to all kinds of negative stories, the challenges are legion. Incidentally, this sector is directly under the control of the President and Commander-in-Chief of the Armed Forces of the Federal Republic of Nigeria, Major General Muhammadu Buhari (retd.). It was supposed to benefit from the fabled integrity, competence of the president and great attention from the highest level of governance.

The sticky part of the challenges in the sector is the fuel subsidy imbroglio, the price as well as the availability of fuel for every Nigerian and business to use for production, service delivery and pleasure. However, despite the humungous fuel subsidy bill, premium motor spirit is not available for all and there is no predictability of its availability across the federation. There is a price per litre for PMS as announced by the Nigerian National Petroleum Company Limited and the Ministry of Petroleum Resources. The rule is that all marketers are supposed to lift fuel from depots at a controlled price and to sell to Nigerians across the federation at the same price at filling stations. Over the last couple of years, the truth is that dispensing fuel from the pumps at the official price is only done in Abuja, Lagos and a few states in the South-West region of Nigeria.

In the South-East, for instance, PMS is sold at filling stations for N250 per litre. No one raises an eyebrow, not even NNPC or task force or any authority disturbs, seals off, prosecutes any marketer for selling at this price. In other parts of the federation, prices are fixed by marketers and no one complains. The marketers insist that they are not buying at the controlled price from the depots; that the increased pump price is a response to the market stimuli based on what they buy from the depots. The petroleum authorities have not denied this fact and have simply kept mum in the pretence that they neither hear nor in any other manner perceive of what is going on. In all these litres, officially sold at N250, NNPC still claims the same margin of subsidy. Thus, the taxpayer is cheated, the system is defrauded and the petroleum authorities get enriched at the taxpayers’ expense.

As of today, when there is purported fuel scarcity in Lagos and Abuja, filling stations in the South-East are selling and you simply drive in and fill your tank if you have the money. It is normal, it is legal in that part of Nigeria, it is the norm and everyone has accepted the practice. This brings up a jurisprudential poser. Are the residents of the South-East or any other part of Nigeria where fuel is officially sold beyond the official price not being subjected to discrimination contrary to the provisions of the 1999 Constitution? The 1999 Constitution prohibits discrimination in S.42 under the fundamental rights chapter. It states that “a citizen of Nigeria of a particular community, ethnic group, place of origin, sex, religion or political opinion shall not, by reason only that he is such a person; be subjected either expressly by, or in the practical application of, any law in force in Nigeria or any executive or administrative action of the government, to disabilities or restrictions to which citizens of Nigeria of other communities, ethnic groups, places of origin, sex, religions or political opinions are not made subject; or be accorded either expressly by, or in the practical application of, any law in force in Nigeria or any such executive or administrative action, any privilege or advantage that is not accorded to citizens of Nigeria of other communities, ethnic groups, places of origin, sex, religion or political opinions.”

The price per litre of PMS is a product of law, executive and administrative action.  Enforcing the administrative order to the extent that persons residents in Lagos and Abuja pay a lower price than persons resident in other parts of the federation is clearly discriminatory and violates the spirit and letter of the 1999 Constitution. The Abuja and Lagos communities have been expressly accorded in the practical application of petroleum laws privileges and advantages not accorded to residents of others parts of Nigeria.

Related News
  • Fuel subsidy to end in 2023 – Finance minister
  • Petrol imports gulp N17tn, refineries stay dormant
  • N1.3tn subsidy, refineries’ bill and rebranded NNPC

Surprisingly, the media and organised labour only draw attention, seek to hold the government accountable, and threaten showdown only when Abuja and Lagos PMS supplies dry up or the price is increased. The NNPC as the sole importer of petroleum products keeps churning out stories of billions of litres of PMS in their storage facilities. Yet, the pumps in Abuja and Lagos are dry. But the people do not seem to understand the games of NNPC and the petroleum authorities. Unveiling this game for all to understand is critical to an appreciation of the need for this subsidy scam to be stopped.

In the presidency days of Goodluck Jonathan, NNPC was reported to have been remitting about $3bn per month to the federation account for sharing by the three tiers of government. Since January 2022, it has hardly remitted anything to the federation account. Stories upon stories have been the norm despite the high oil prices, a product of the Russian-Ukraine War. Apart from this, fuel subsidy for the first six months of 2023 is projected at N3.36tn, when translated to US dollar, this will amount to $7.71bn. For 2022, we will be ending up with not less than N5tn in the phantom subsidy.

The official position is that subsidy has ballooned from 35 million litres a day in 2015 to the present 68 million litres. Recall that the oil probe in the National Assembly and the Executive in the President Jonathan era established conclusively that the subsidy claims were inflated, with companies claiming petrol supplies that were never imported, with ships that were nowhere near our waters. It was simply about the manipulation of shipping papers and inordinate opportuning. The ballooning subsidy claim is not supportable by empirical evidence. Since 2015, Nigeria has passed through two recessions, unprecedented insecurity that has negatively impacted economic activities, massive factory closures, and the highest unemployment rate since independence. Energy consumption is inextricably linked to economic activities and growth.

It is time for Nigerians, in our enlightened self-interest, unanimously to call for a stop to this massive scam, the fraud called fuel subsidy, which has provided the opportunity for the greatest state-sanctioned stealing in the history of humanity. The petroleum authorities are treating Nigerians like a cigarette lit from the top and the lower part. We pay subsidies, do not get regular fuel supply; get supplied adulterated fuel from time to time; the same subsidized fuel is sold at higher than official prices in many parts of the federation, etc. This is insane and needs to stop.


Bag of controversies: Mystery of Nigeria’s daily petrol consumption


Oyegun’s ex-aide dumps APC


APC debunks Tinubu US entry denial, shares visa


Why I issued executive orders – Adeleke


Liberian President slammed for long stay abroad 


Don’t blame us, you failed Nigerians, govs reply FG


Rufai: Ogun govt refutes $50,000 payment allegation


Watching W’Cup from home hurts, Eagles stars lament


How my sister was framed, abused, jailed in UAE – Brother


More like this