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Kerosene subsidy to cost govt N310 billion in 2012

By Emmanuel Aziken, Political Editor
Federal Government is to spend an estimated N310 billion in subsidizing kerosene in the next fiscal year,  it has emerged. The government’s outlay on subsidizing the fuel of choice for many low income Nigerians is despite strong arguments by members of the administration’s Economic Management Team for the complete removal of subsidies on kerosene and other petroleum products.

President Goodluck Jonathan, according to informed sources, rejected the submission by the canvassers for the removal of the subsidy on kerosene on the argument that the classes of people using the product as domestic fuel are those that must receive the direct support of government.

Jonathan’s decision to retain the subsidy on kerosene is despite his strong commitment to remove subsidy on petrol, a decision that has drawn flak from a wide section of the country.

Arguments for and against the removal of subsidy on petrol presently estimated at more than N1 trillion, is now a subject of brickbats between administration officials and the country’s labour leaders who have vowed to press government to reverse the decision on the basis of the alleged corruption and inefficiency in the petroleum sector.

The president, it was learnt at the weekend, has, however, rejected the arguments put forward by members of the Economic Management Team, EMT, that all petroleum products including kerosene should be deregulated. In putting forward the argument, the EMT had affirmed that the government would save as much as N300 billion being the amount projected for subsidy on the product in 2012.

According to the arguments put forward, the government was subsidizing the product by as much as N85 per litre. Kerosene is available at the pump price at a regulated price of N50 per litre.

It was learnt that with a projected daily consumption of about 10 million litres per day in 2012,  government would be subsidizing the product to the tune of N850 million a day and N310 billion at the end of the year.


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