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Bullion

Keywords

Premium Motor Spirit, Subsidy payment, Local refinery

Abstract

Subsidy payments on premium motor spirit (PMS) in Nigeria have impacted significantly on revenue of the government over the years. The tempo has been on the upward trend over time, resulting in fiscal concerns necessitating immediate government attention. The economy suffered operational challenges, leading to loss of huge revenue. several suggestion on how to address the issue have been provided by various governments over the years, but a permanent solution to the problem are yet to be achieved. thus, this paper reviews the issues and found that, beyond the revenue concern to the government, importing PMS into Nigeria takes about 49.0% of the foreign reserve annually. it suggests initiatives that could reduce the consumption of PMS substantially\, while improving production to reduce imports, and utilization of foreign exchange, as well as removing existing subsidy.

Author Bio

The authors are staff of the Research Department, Central Bank of Nigeria.

Publication Title

CBN Bullion

Issue

1

Volume

42

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