We Subsidise Fuel Importation With N383 Billion — NNPC
The Group Managing Director (GMD) of the Nigeria National Petroleum Corporation (NNPC) , Mr Maikanti Baru on Thursday stated that the corporation is using $1.05 billion from dividends of Liquefied Natural Gas ( LNG) , to augment daily shortages incurred in the pump price of Petrol.
The GMD of Oil Corporation made this known while appearing before Senate Committee ad hoc Committee investigating alleged $3.5 billion subsidy in special account.
Baru further revealed that the Corporation pays N40 as subsidy on per liter of Petroleum Motor Spirit (PMS) explaining that the landing cost of the PMS is N185 per liter.
He told the lawmakers that $1.05bn which is equivalent of N383.2bn taken from LNG dividends is domiciled in a special account with the Central Bank of Nigeria (CBN) called National Fuel Support Fund (NFSF) for the purposes of augmenting loses incurred from petrol pump price of N145 per litre as against N185 per litre it supposed to be .
He said: “Based on available parameters from landing to transportation costs, the pump price of PMS supposed to be N185 per litre as against the official price of N145 per litre , indicating shortage of N40 per litre.
“Since subsidy is not appropriated for and pump price not adjusted upwardly, NNPC had no other reason than to in line with its establishment Act, section 7 sub section 4(b), defray its costs from its revenue.”
He explained further that the $1.05 billion costs augmentation money came into being in October last year when Independent Marketers pulled out of the supply chain of importation of PMS into the country as a result of increase in landing cost without corresponding increase in pump price .
He added that the issue of subsidy or pump price increase can best be tackled by the National Assembly and not the NNPC, failure of which he said, will make smuggling of petroleum products across Nigerian borders, lucrative business by smugglers .
According to him, The N145 per litre pump price of PMS in Nigeria is the lowest when compared to N400 it is sold in Cameron, N350 in Ghana, N330 in Benin Republic etc.
It could be recalled that investigation into alleged warehousing of $3.5 billion was sequel to point of order raised by Senator Biodun Olujinmi alleging that NNPC is warehousing the fund for fuel subsidy .