Nigeria approves $2.6bn spending plan for fuel subsidies

Nigeria’s Senate approved a supplementary spending plan on Tuesday for overdue fuel subsidy payments and more funds for troops fighting an Islamist insurgency in the northeast.

Lawmakers backed 522.2 billion naira ($2.6 billion) payments on subsidies for 2015 and more than 36 billion naira for the military’s fight against Boko Haram, according to records of proceedings in Abuja, the capital.

Nigeria relies on refined fuel imports to meet more than two-thirds of domestic needs and refunds importers as much as a third of the cost of supply. Fuel queues resurfaced two months ago as importers claimed the government was withholding subsidy payments. President Muhammadu Buhari requested approval for the additional spending as the lines persisted.

Despite the finances of Africa’s largest economy suffering from last year’s drop in oil prices, Buhari’s administration has for now ruled out scrapping fuel subsidies.

Next year’s budget hasn’t yet been finalized, though it may climb by 56 percent to about 7 trillion naira, according to a person who attended a briefing on the government’s plans and asked not to be identified because the matter is private.

 – Bloomberg [Elisha Bala-Gbogbo]