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Nigeria to spend $6 billion on 2013 fuel subsidy

19 September 2013, 09:11

Abuja - Nigeria will spend a total of 971 billion naira on fuel subsidy payments in 2013, the finance minister said on Wednesday, roughly the same as in the previous year but a 55 percent drop on 2011, when subsidy fraud was rampant.

Finance Minister Ngozi Okonjo-Iweala has tried to place greater controls on state payments for fuel imports into the country to try to tackle the corruption that has seen up to half the fuel subsidy wasted.

Okonjo-Iweala said the subsidy was 950 billion naira last year, compared with 2.2 trillion the year before. The figure was nonetheless equivalent to about a fifth of the budget.

"This administration has worked hard to clean up the process of the subsidy payment ... (We) fired old auditors, put new ones in place, avoided conflicts of interest and ... (put in) checks and balances," Okonjo-Iweala told reporters in Abuja.

Parliament and the finance ministry last year both probed Nigeria's fuel subsidy, in the aftermath of an aborted attempt to remove it - President Goodluck Jonathan was forced in January of that year to reinstate it after a week of protests.

The probes exposed a web of corruption and fraud by government officials and fuel marketers that cost the state billions of dollars, with much paid for fuel never being ordered or being diverted to the country’s neighbours.

The government initially cut back the number of approved fuel suppliers, but this has since been expanded to include some companies named in the probes.

The finance ministry says some have since been cleared, but has declined to comment on which ones.

However, the ministry now publishes all payments made to fuel marketers in a bid to improve transparency.

Economists say the regulated fuel price feeds corruption, creates fuel shortages and prevents much needed investment in oil refining, but it is popular with Nigerians who see it as the only benefit they get from living in an oil-rich state.

- Reuters


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