Govt owes NNPC N1.3tr on subsidy

21 November 2012, Sweetcrude, Abuja – THE Nigerian National Petroleum Corporation, NNPC, says it is being owed over N1.3 trillion ($8.2 billion) by the federal government in respect of fuel import subsidies.

“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,” the Associated Press quoted an unnamed senior NNPC official as saying.

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.

Despite producing about 2.4 million barrels of crude oil a day, Nigeria imports most of its petrol because its refineries are unable to meet the nation’s demand.

The NNPC source also said the corporation, which used to account for 60 per cent of Nigeria’s imports, now accounts for all of them.
Premium motor spirit, also known as petrol has remained largely unavailable to users across the country since early this year, following the refusal of major and independent oil marketers to import fuel due to the delay in the payment of their outstanding subsidies.

About the Author