Kemi Adeosun, minister of finance, says technically, there is no fuel subsidy — but the national oil company is currently under-recovering cost of product imports because of high prices of crude oil. She was briefing the media on Wednesday after cabinet meeting.
Government officials have been singing different tones over the subsidy issue — it was once claimed that it had been abolished, but Vice-President Yemi Osinbajo said in December that it was NNPC, and not the government, that was paying it.
State governors have accused the Nigerian National Petroleum Corporation (NNPC) of short-paying the federation account from crude oil sales — although the corporation said it was funding the importation of products from its operations.
But Adeosun, responding to question on who pays the differentials between N171 Lansing cost for petroleum and N145 pump price, said “the price of oil for Nigeria today is a double-edged sword. So every dollar that goes up we get more revenue but also because we are importing refined petroleum increases the landing cost of fuel.
“So for every time we get excited that the oil price is going up, there is also a knock on effect on the price of imported PMS and that is a function of us not having refining capacity, it is one of the unfortunate impact of that.
“Now, when there is talk of payment of subsidy, technically today, there is no subsidy but there is under recovery. NNPC are currently doing all the importing. They are importing at a higher price than they are selling which means they are losing money, which means effectively that loss is being borne by everybody and effectively it reflected in the federation account.
“So, there is no subsidy payment in the way the old subsidy scheme used to work where they were paying the oil marketers.”
NNPC said on Monday that the federal government was indebted to it to the tune of N170.6 billion outstanding subsidy payments due from January 2006 to December 2015.
The governors, on the platform Nigeria Governors Forum (NGF), had last week accused NNPC of failure to remit to the federation account the joint venture cash cll for five years.
