President Muhammadu Buhari has directed Finance Minister Kemi Adeosun immediately pay overdue subsidies of 407 billion naira ($2.06 billion) “to bring to a quick end to the lingering fuel crisis which has caused great suffering to Nigerian families and businesses”.
The payment covers arrears from 2014 and this year and further details will be published in national newspapers.
Pumps ran dry across Nigeria last month after marketers said they needed to be paid the subsidies before they could re-stock. The government caps gasoline prices at 87 naira a liter. Muhammadu Buhari has ruled out scrapping subsidies for now, despite the finances of Africa’s biggest oil producer being ravaged by crude prices falling to around $40 a barrel from $125 around 18 months ago.
Fuel subsidies costs Nigeria $35 billion between 2010 and 2014 and have mainly benefited wealthy Nigerians, who buy more fuel than the poor, the World Bank said in a report on Tuesday.
“The benefits of the fuel subsidy in Nigeria appear quite limited, while the costs are high,” according to the World Bank report.