NNPC Official Tells Senate, Stopping ‘Subsidy’ Will Create Massive Fuel Scarcity

An official of the Nigerian National Petroleum Corporation (NNPC), has informed the Senate that any attempt to stop the payment of subsidy, will result in scarcity of the product.

The Senate, during plenary on Thursday, asked the Corporation to discontinue the payment of subsidy on petrol and refund N216 billion already expended.

The lawmakers, while issuing the directive, described the subsidy paid by the NNPC as illegal, as the money was not appropriated.

But reacting to the directive, an official of the NNPC, who spoke to online newspaper, The Cable, said complying with the Senate’s order would create a big shortfall in supply.

“In a situation where private companies are not importing, leaving the NNPC as sole importer, how do you provide for the 50 million litres of daily demand in the country,” the official said.

Maikanti Baru, Group Managing Director of the NNPC, had previously said the Corporation spends N774 million daily for subsidising petrol supply.

He explained that the situation was so, because the NNPC is the sole importer of fuel into the country, and as well bears the burden in the cost in importing the product.

It said it had continued to bear the loss, which simply translates to a shortfall in revenue NNPC should have transferred into the federation account, to ensure uninterrupted fuel supply in the country.

The Corporation had also reported that nearly 1.5 million tonnes or 1.89 billion litres of petrol are on standby for shipment.

Recall that in 2016, Minister of State for Petroleum, Ibe Kachikwu, said the federal government made a savings in excess of N1.4 trillion since subsidy was removed from petrol in the early part of 2016.

He said such savings could kick-start the “long overdue process of revamping critical infrastructure in the downstream sub-sector such as pipelines, refineries and tank farms”.

It will be recalled that in 2012, the former administration of Goodluck Jonathan, came under intense scrutiny from all corners, especially the opposition after it claimed to have spent N1.2 trillion on fuel subsidy.