We Borrow Money To Buy Petrol – Federal Government

The Federal Government has said that it sometimes borrows money to buy petrol as the country continues to incur rising fuel subsidy bills.

The Minister of Finance, Budget and National Planning, Zainab Ahmed, stated this on Tuesday during an interview on Arise TV.

According to the Minister, there is a high possibility of global economic recession this year.

However, she stated that the country’s foreign reserve is able to withstand the shocks.

Speaking further, Ahmed explained that the country had to borrow funds to buy fuel despite the huge subsidy spending on the commodity.

Ahmed again insisted on ending the fuel subsidy regime, while adding that it would be done gradually from the second quarter of this year by the current government.

She said the government would be able to increase the revenue performance on the 2022 figure, as well as reduce the debt service to revenue ratio.

“We also have to exit fuel subsidy, because that is also a very significant contributory factor. You can look at it in two ways – it is revenue that would have come to the government but it doesn’t because it has been spent on fuel subsidy,” she said.

The minister added, “But also, where there is nothing for the government to buy the refined petroleum products, we have to borrow to buy the petroleum products. So if you take that out, that’s about N3.25tn, that is a significant relief.”