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Subsidy Claims: Govt owes us N1.3t on subsidy – NNPC

By on November 21, 2012

Andrew Yakubu, NNPC GMD

The Nigerian National Petroleum Corporation (NNPC), yesterday cried out that it has been struggling to cope with their fuel import programme because they are owed more than N1.3 trillion ($8.2 billion) in government fuel import subsidies, debts.

“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 reimburses importers as subsidies to cover the difference between the landing cost of the fuel and the fixed domestic pump price.

As at 2011 subsidy debt stood at N752.7 billion, however rose to N1trillion in the first half of this year, the official said.

Long queues of vehicles at service stations, which first started to be felt three months ago, have become routine across major cities in the country due to a shortage of fuel.

NNPC has taken on sole responsibility for the provision of gasoline in the country after private companies withdrew following delays in the payment of subsidies in the first and second quarters of this year. Previously NNPC accounted for only 60 per cent of gasoline imports into the country.

Because of the large-scale fraud discovered in the subsidy scheme, which gulped over N2.7 trillion in 2011, the Federal Government said it will only pay subsidy claims cleared by a presidential panel set up to verify import documents submitted by companies.

President Goodluck Jonathan on Sunday said the government would revisit the need to do away with subsidies and deregulate the downstream oil sector so that the country can attract private sector investors. He said he believes when investors build refineries in the country fuel prices will become normal.

  • Nura Mohameed Kamfut

    Dat means we should expect more tougher time ahead