Govt owes us N1.3t on subsidy, says NNPC

Posted by: Our Reporter Posted date: November 21, 2012 In: Business, Featured

 

NNPC Building

The Nigerian National Petroleum Corporation (NNPC) said yesterday it is owed more than N1.3 trillion ($8.2 billion) in government fuel import subsidies, debts which could impact on the corporation’s fuel import programme.
“As at today, the outstanding amount due to the NNPC on subsidy claims is in excess of N1.3 trillion. [The debt is] making things… difficult as we have been struggling to cope with our fuel import programme,” a senior NNPC official said.
The government pays subsidies to importers to cover the difference between the landing cost of the fuel and the fixed domestic pump price.
The subsidy debt rose steadily from N752.7 billion at end of 2011 to N1trillion in the first half of this year, the official said.
Long queues of vehicles at service stations remain common place across major cities in the country due to a shortage of fuel that first started to be felt three months ago.
NNPC previously accounted for 60 per cent of gasoline imports into the country but has taken on sole responsibility after private companies withdrew following delays in the payment of subsidies in the first and second quarters of this year.
Following large-scale fraud uncovered in the management of the subsidy scheme that swallowed N2.7 trillion in 2011, according to Central Bank of Nigeria (CBN) figures, the Federal Government said it will only pay subsidy claims cleared by a presidential panel set up to verify import documents submitted by companies.
Nigeria imports more than 85per cent of its refined fuel needs due to the inadequate state of its refining sector.
President Goodluck Jonathan on Sunday said the government would revisit the need to abolish subsidies and deregulate the downstream oil sector if the country is to attract private sector investors to build refineries in Nigeria and curb fuel imports

SOURCE: 21 November 2012.