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FG moves to share electricity subsidy costs with states

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The Federal Government has moved to end the practice of carrying electricity subsidy costs alone, announcing a framework that will spread the burden across federal, state, and local governments from 2026.

The Director-General of the Budget Office of the Federation, Tanimu Yakubu, disclosed this on Monday in Abuja during a training and sensitisation workshop for ministries, departments, and agencies on the 2026 post-budget preparation process using the Government Integrated Financial Management Information System Budget Preparation Sub-System.

Yakubu said President Bola Tinubu had directed that electricity subsidy costs be made explicit, tracked, and fairly shared across tiers of government, warning that the current approach creates hidden liabilities and recurring crises in the power market.

“If we want a stable power sector, we must pay for the choices we make,” he said. “When tariffs are held below cost, a gap is created. That gap is a subsidy. And a subsidy is a bill.”

He added that from 2026, the Federal Government would no longer treat electricity subsidies as an open-ended obligation borne solely by the centre, especially where policy decisions and political benefits are shared.

“In 2026, we will stop pretending that this bill can be left to the Federal Government alone, especially where the policy choice or the political benefit is shared across tiers of government,” Yakubu said.

According to him, the President has instructed that the existing electricity sector legal framework be invoked to ensure that subsidy sharing is practical, transparent, and enforceable.

“This means subsidy costs must be explicit, tracked, and funded, so they do not return as arrears, liquidity crises, or hidden liabilities in the market,” he said. “If any tier of government chooses affordability interventions, the funding responsibilities must be clear, agreed, and enforceable.”

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Yakubu stressed that the policy was not designed as a sanction but as a mechanism to align incentives across government and support efficiency in the power sector.

“This is not punishment. It is alignment,” he said. “When everyone carries a fair share of the cost, everyone also has an incentive to support cost-reflective efficiency, targeted protection for the vulnerable, and a power market that can actually deliver.”

He told MDAs to reflect subsidy-related costs clearly in their 2026 budget submissions and avoid pushing unfunded liabilities into the electricity market.

Beyond power subsidies, Yakubu said the 2026 Budget marked a clear break from rollover budgeting and fragmented project lists, which he said had weakened execution and accountability over the years.

“The 2026 Budget corrects this. It is built as one coherent implementation framework,” he said. “The approach is to consolidate commitments into a single, visible pipeline and manage them as a disciplined programme of delivery.”

He described this approach as a “single-train” framework, adding that it would improve prioritisation, strengthen control, and reduce duplication across government. “One plan. One pipeline. One execution logic,” he said. “It allows the government to know, at any point, what we have committed to deliver.”

Yakubu also revealed that the President had directed a review of the Fiscal Responsibility framework to make fiscal rules more dynamic and enforceable, rather than abandoning them.

“Fiscal rules are the guardrails of the government,” he said. “Without guardrails, spending becomes impulsive, debt becomes casual, and the budget becomes a statement of intent rather than a tool of delivery.”

He explained that the review would introduce clearer fiscal anchors, better-defined escape clauses for genuine shocks, and a credible path back to compliance, alongside stronger reporting on contingent liabilities.

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For MDAs, he said this would change how proposals are assessed. “You will not only be asked what you want to spend. You will be asked how it fits the fiscal rules, how it affects sustainability, and what measurable results it will deliver,” he said.

The Budget Office chief further announced that the 2026 Budget would deepen the shift from long project lists to project financing, insisting that capital proposals must be delivery-ready and, where appropriate, finance-ready.

“A long list of projects is not a development strategy,” Yakubu said. “What citizens feel is delivery, completed roads, reliable power, functional schools, working hospitals.”

He said projects submitted for funding in 2026 must demonstrate readiness, sequencing, a clear financing strategy, and measurable outputs and timelines, adding that fewer but better-funded projects would deliver more impact.

Yakubu described GIFMIS-BPS as central to restoring budget credibility, saying it was “the operating system for credible budgeting” that improves transparency and traceability from submission to execution.

“The success of the Renewed Hope Agenda is shared,” he said. “The Budget Office will coordinate and enforce standards. But delivery depends on every MDA. Nigerians expect results. And through a credible 2026 Budget, we must deliver.”

The workshop aims to align MDAs with new budget expectations, improve compliance, and strengthen the link between planning, financing, and results in the 2026 fiscal year.

The PUNCH earlier reported that amid its struggles to pay the over N4tn debt owed to power generation companies, the Federal Government incurred a total of N1.98tn in electricity subsidy obligations in 12 months, from October 2024 to September 2025.

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This was according to the quarterly reports released by the Nigerian Electricity Regulatory Commission.

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Lagos bans petroleum tankers from transporting edible oil

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The Lagos State Government has banned the use of petroleum tankers in the transportation and distribution of edible oil as part of efforts to strengthen food safety, hygiene, and compliance standards across the sector.

The restriction forms part of a broader regulatory framework introduced through a Memorandum of Understanding (MoU) signed between the Lagos State Consumer Protection Agency (LASCOPA) and major stakeholders in the edible oil transportation chain.

The agreement involves the Marketers and Sellers of Edible Oil Association of Nigeria (MASEON), the Nigerian Association of Road Transport Owners (NARTO), and the Association of Edible Oil Tanker Drivers of Nigeria under the National Union of Edible Oil Tanker Drivers of Nigeria (ETD/NUEOTDN).

In a statement issued on Friday, LASCOPA said the move was aimed at stopping the use of tankers previously deployed for petroleum and hazardous substances in the transportation of edible oil.

The agency warned that the practice exposes consumers to serious health risks caused by possible contamination from chemical residues left in fuel tankers.

“The key objectives of the agreement include ensuring that tankers designated for edible oil transportation are used exclusively for that purpose; preventing the use of edible oil tankers for petroleum products and hazardous substances,” the statement read.

According to the agency, the MoU introduces a strict compliance framework mandating the exclusive use of food-grade certified tankers for edible oil transportation.

LASCOPA said the framework would also strengthen hygiene standards, improve traceability, and enhance operational monitoring within the edible oil distribution chain.

The agency added that stakeholders have committed to implementing tanker registration and identification systems, periodic inspections, random spot checks, laboratory testing of edible oil samples, and joint enforcement operations to ensure full compliance.

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It further stated that enforcement activities would be intensified under the Lagos State Consumer Protection Agency Law, 2025.

“Stakeholders are committed to tanker registration, identification systems, periodic inspections, random spot checks, laboratory testing of edible oil samples, and joint enforcement operations to ensure compliance,” the statement added.

LASCOPA also said it would step up monitoring activities and investigate consumer complaints as part of efforts to protect public health and improve consumer confidence in food transportation standards across Lagos State.

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NNPC urged to revive refineries after Dangote snub

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The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, has tackled the Nigerian National Petroleum Company Limited (NNPC) over its attempt to increase its stake in the Dangote Petroleum Refinery despite the poor state of government-owned refineries.

Ukadike stated this while reacting to comments by the President of the Dangote Group, Aliko Dangote, that the refinery rejected requests by the NNPC to increase its 7.25 per cent stake in the $20bn facility.

Dangote had disclosed this during an interview with the Chief Executive Officer of the Norwegian Sovereign Wealth Fund, Nicolai Tangen, monitored by our correspondents on Wednesday.

Reacting to the development, Ukadike questioned why the national oil company was seeking to invest more funds in the privately-owned refinery when the Port Harcourt, Warri, and Kaduna refineries under its control had remained largely inactive despite billions of dollars spent on rehabilitation.

“Why is NNPC trying to invest money in the Dangote refinery when it has three refineries that are not working? Why is NNPC not investing that money in those ones?” Ukadike asked.

He added, “The NNPC did not revive our refineries, but they want to look for where the refinery is already working to put money into it. Does that make sense?”

The IPMAN spokesman said Dangote had the right to reject the offer from the NNPC if he considered it unsuitable for his business interests.

“If Dangote refused to sell more stakes to NNPC, he must have his reasons. Dangote is a businessman. He doesn’t want issues, unnecessary crises, and nepotism. He knows what he wants, and I also think he has enough cash to fund his business,” he stated.

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Ukadike further urged the national oil company to focus on reviving critical oil infrastructure across the country instead of pursuing additional ownership of the refinery. “The NNPC should repair the pipelines and revive the refineries instead of eyeing the Dangote refinery,” he said.

Dangote had stated during the interview that the NNPC was interested in acquiring more shares in the refinery after previously purchasing a 7.25 per cent stake for $1bn in 2021. According to him, the request was rejected because the company planned to list the refinery publicly and allow more Nigerians to own shares in the project.

“The other biggest risk is government inconsistencies in policies, and we are addressing that one because if you look at our refinery, the national oil company already owns 7.25 per cent, and they are trying to buy more. We are the ones that said no; we want to now spread it and have everybody be part of it,” Dangote said.

The NNPC had initially planned to acquire a 20 per cent stake in the refinery, but later reduced its ownership to 7.25 per cent after failing to pay the balance before the June 2024 deadline.

Dangote had explained this in 2024, saying, “The agreement was actually 20 per cent, which we had with NNPC, and they did not pay the balance of the money up until last year; then we gave them another extension up until June (2024), and they said that they would remain where they had already paid, which is 7.2 per cent. So NNPC owns only 7.2 per cent, not 20 per cent.”

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However, a stakeholder in the petroleum sector who pleaded for anonymity because of the sensitivity of the matter held that the interest of the nation is well served by NNPC having a 20 per cent stake in the Dangote refinery.

“I think Nigeria is better served by NNPC being a shareholder. If NNPC could have taken 20 per cent of that refinery, Nigeria as a country would be better served,” the stakeholder said.

According to him, the fact that the NNPC failed to get the 20 per cent take before does not mean it could not get it again. He said Dangote refused NNPC’s offer because he wants to remain in control.

“You know Dangote is planning to value his company at $50bn. I think he’s going to sell 10 per cent only, so he remains in control, making a lot of money for himself. Selling only 10 per cent means he has 90 per cent. If NNPC were there with 20 per cent, then NNPC would have two directors. These two directors would have some say,” he said.

The stakeholder added that such an important asset cannot exist in a country without the government’s involvement.

“You can’t have such a big asset in the country, and then the government or the government’s agent has no say in the decisions of that company. It can’t happen. It’s wrong. I’m not saying the government must have a say in all the big companies, but in a company that is so big that it can influence whether the sun rises or falls in that country, the government must have a say.

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“The refinery is big. In any case, NNPC is also the supplier of last resort. It’s the national oil company. That has some meaning. I think that in the best interest of the country, if we all agree that Dangote is too big to fail, then it means that Nigerians as a people need to be inside the Dangote refinery to make sure it does not fail,” the operator said.

Meanwhile, a senior official of the NNPC said the NNPC is proud of its current stake in the Dangote refinery.

“The NNPC is proud and happy that we own a 7.2 per cent stake in Dangote. And whatever we own as a stake in Dangote as a national oil company is on behalf of the entire Nigeria. So, when the opportunity presents itself in the long term, yes.

“But right now, we are proud of the 7.2 per cent stake we own in the Dangote refinery. Apart from that, the quality and level of collaboration that is currently going on between NNPC and Dangote is in the interest of the entire Nigeria,” the official said, begging not to be mentioned because he was not authorised to speak on the matter.

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2027 poll spending may trigger inflation, MPC warns

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The Governor of the Central Bank of Nigeria and Members of the Monetary Policy Committee have warned that rising political and election-related spending ahead of the 2027 general elections could undermine the country’s disinflation gains and trigger fresh inflationary pressures.

The warnings were contained in the personal statements of MPC members released by the apex bank and obtained by The PUNCH on Thursday. The MPC, at its 304th meeting held on February 23 and 24, 2026, reduced the Monetary Policy Rate by 50 basis points from 27 per cent to 26.5 per cent, while retaining other key monetary parameters.

CBN Governor, Olayemi Cardoso, had earlier warned in the MPC communiqué that election-related fiscal spending could threaten the inflation outlook despite the current moderation in prices.

According to the communiqué signed by Cardoso, “The outlook indicates that the current momentum of domestic disinflation will continue in the near term. This is premised on the lagged impact of previous monetary policy tightening, sustained stability in the foreign exchange market and improved food supply. However, increased fiscal releases including election-related spending could pose upside risk to the outlook.”

Also, in his personal statement, he noted “Growing fiscal pressures, from reduced government fiscal headroom and the approaching 2027 election cycle, warrant particular attention given the well-established link between pre-election fiscal expansion and inflation.”

CBN Deputy Governor for Economic Policy, Dr Muhammad Abdullahi, also highlighted election-related spending as a major risk to the inflation outlook. He said, “As political activities intensify ahead of the 2027 elections, increased fiscal injections and consumption spending could elevate demand-side inflation.”

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Abdullahi added that “the fiscal deficit has already increased significantly, and election-related spending is likely to exacerbate this trend in 2026 and early 2027.” According to him, stronger fiscal-monetary coordination would be needed to manage the liquidity impact of rising government spending.

Similarly, the CBN Deputy Governor for Operations, Emem Usoro, warned that the pre-election environment could worsen liquidity conditions and inflation expectations. Usoro stated, “Crucially, the pre-election environment increases the risk of liquidity surges, higher FX demand and a drift in inflation expectations.”

She added that the risks justified maintaining tight liquidity conditions despite the moderate rate cut. According to her, “These considerations support small, cautious adjustments and the retention of strong liquidity and prudential buffers.”

Also raising concerns was the newly appointed Deputy Governor, Lamido Yuguda, who said increased fiscal releases and election spending could disrupt the disinflation trend.

Yuguda, who was a former Director General of the Securities and Exchange Commission, noted, “The 75 per cent CRR on non-TSA public deposits remains critical, particularly given the potential for increased fiscal releases as implementation of Executive Order 9 advances.”

He further warned that, “Potential increases in fiscal spending associated with the electoral cycle could generate demand pressures and disrupt the disinflation trajectory.”

A member of the MPC, Dr Aloysius Ordu, warned that political spending tied to the elections could put pressure on foreign exchange demand and test the resilience of the economy. He said, “Domestically, rising political spending and FX demand pressures associated with the 2027 elections will test the resilience of the economy.”

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Ordu added that although reforms such as Executive Order 9 were expected to improve fiscal transparency and strengthen reserves, high debt servicing costs and political-cycle spending remained major concerns for macroeconomic management.

Another MPC member, Bandele Amoo, also expressed concern over excess liquidity from fiscal injections and early political activities ahead of the elections. He said, “My primary concern is the persistence of excess liquidity from fiscal injections, which could undermine disinflation gains and exchange rate stability.”

Amoo further noted that “fiscal spending pressures linked to the 2026 budget cycle, and early political activities ahead of the 2027 elections may heighten risks.”

Another committee member, Professor Murtala Sagagi, said the main domestic risks to inflation included fiscal slippages and election-related spending. He said, “Upside risks to the inflation outlook warrant monitoring, particularly increased fiscal releases including election-related spending and any pass-through from global oil price volatility to domestic fuel prices.”

Sagagi added that “the primary domestic risks are fiscal slippage and the possibility of election-related spending which are medium-term in nature.” He urged stronger fiscal discipline and closer coordination between monetary and fiscal authorities.

The next meeting of the Monetary Policy Committee is scheduled to hold on Tuesday, May 19 and Wednesday, May 20, 2026. This would be about four days after the National Bureau of Statistics is expected to release the country’s Consumer Price Index report for April 2026 on May 15.

Nigeria’s inflation rate rose to 15.38 per cent in March 2026, marking a reversal in the recent easing trend, as increases in food, transport, and accommodation costs pushed prices higher. The PUNCH observed that this was the first time the headline inflation rate had increased since March 2025.

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In its Inflation Forecast report for April 2026, the Financial Market Dealers Association projected that Nigeria’s headline inflation would rise to 16.42 per cent year-on-year in April 2026, as sustained pressure from food prices, higher energy costs and elevated global commodity prices continue to shape the domestic price environment.

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