$3.5bn: It’ll Be Illegal For NNPC To Operate Subsidy Account – Baru

The Nigerian National Petroleum Corporation (NNPC), on Thursday, declared that it will be illegal for it to operate a subsidy account.

Group Managing Director (GMD) of the Corporation, Maikanti Baru, made the declaration before the Senate Ad hoc Committee probing the alleged $3.5 billion petroleum subsidy fund.

In his presentation before the Committee, Baru explained that the NNPC set up the sum of $1.05 billion to augment the shortfall in oil price disparity.

“The N145 pump price has become less than the open market price; so, marketers withdrew from operation since October 2017. The final crisis that engulfed the country late 2017 and early 2018 was fuelled by rumours of proposed increase in pump price.

“The actions of the NNPC were in compliance with the National Assembly directive that the Corporation should ensure adequate supply. NNPC will continue to maintain constant energy supply to Nigerians at N145.

“NNPC is not operating any $3.5 billion as alleged. Instead, NNPC set aside $1.05 billion to augment the shortfall between the N145 and market price. The money is domiciled with the Central Bank of Nigeria (CBN) under the National Fuel Support Fund (NFSF) – it is to fill the gap between the landing price and the pump price. The $3.5 billion is a figment of the imagination of Senator Abiodun Olujimi,” he explained.

Baru added that smuggling will continue in the face of sabotage.
“Our account empowers us to defray costs from our operations. Sharp practices by oil marketing companies were hoarding and smuggling.

“No neighbouring country is selling PMS (Primum Motor Spirit) at less than N325 per litre. As long as the sabotage continues, the smuggling will continue,” he added.

He revealed that about 49 million litres of fuel were evacuated out of Nigeria in 2016, while 53 million litres were evacuated in 2017.

Baru assured Nigerians that there will not be fuel scarcity as Christmas approaches.

“NNPC has 1.9 million litres of PMS in stock that will last for 39 days. Our plan is to have in stock the quantity that will last for 49 days,” he revealed.

The Committee, which was headed by the Senate Majority Leader, Senator Ahmed Lawan, was made up of 15 members.

The sitting was adjourned till next Tuesday, November 6.