Nigeria could spend up to N6.72 trillion ($16.2 billion) next year if it keeps a fuel subsidy in place, Finance Minister Zainab Ahmed said on Thursday, a nearly 70% jump from this year's budget.

In April, the National Assembly approved a N4 trillion petrol subsidy for this year after President Muhammadu Buhari asked for additional funds to offset higher global oil prices driven by the conflict in Ukraine.

Ahmed said the federal government was working with two scenarios, one that assumed a "business-as-usual" approach where a subsidy would be in place throughout 2023 and would cost N6.72 trillion.

The second option "assumes that petrol subsidy will remain up to mid-2023..., in which case only N3.36 trillion will be provided for," she said during a pre-2023 budget consultation in the federal capital Abuja.

Africa's biggest oil producer, Nigeria imports all of its refined products because local refineries have been mothballed for years. It has started to repair some of the refineries.

Higher crude prices are being offset by lower production due to oil theft and vandalism of pipelines in the oil-rich Niger Delta, said Ahmed.

She said oil output had averaged 1.32 million barrels per day during the first four months of this year. That means Nigeria has failed to meet its 1.8 million bpd OPEC quota.

Oil and gas revenue, which came in at 1.23 trillion naira between January and April, was way below a projected 3.12 trillion naira, Ahmed said.

"Revenue performance is expected to improve in the second half of 2022 as a result of concerted efforts to address the oil theft and pipelines vandalism," the finance minister said.

$1 = 415 naira

Reuters