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CBN Faults Fuel Subsidy Report

By on May 3, 2012

The Central Bank of Nigeria has denied making payments of N 844.9 billion to the Nigerian National Petroleum Corporation (NNPC) for fuel subsidy, as alleged in the Fuel Subsidy Report.

In a letter to Speaker Aminu Tambuwal and Hon. Farouk Lawan, dated April 27th, the CBN categorically denied making any such payment for fuel subsidy.

Lawan’s Committee’s report had unveiled the existence of the payment that both CBN and NNPC now seem to have no knowledge of.

According to the Fuel Subsidy Report, ““Contrary to the earlier official figure of subsidy payment of N1.3 trillion, the Accountant-General of the Federation put forward a figure of N1.6trillion, the CBN N1.7trillion while the committee established subsidy payment of N2.587.087trillion as at December 31, 2011 amounting to more than 900per cent over the appropriated sum of N245billion.

“The figure of N2.587.087trillion is based on the CBN figure of N844.944b paid to NNPC in addition to another figure of N847.942billion reflected as withdrawals by NNPC from the Excess Crude Naira Account as well as the sum of N894.201billion paid as subsidy to marketers.

“The figure of N847.942billion quoted above strongly suggests that NNPC might have been withdrawing from two sources especially when the double withdrawals were also reflected both in 2009 and in 2010.”

The CBN debunks that claim in its letter which states, “Please be informed that following the submission of the ad-hoc committee’s report on the above subject to the House, the CBN hereby responds to some of the observations and recommendations contained in the Report, as it affects the Bank

“The CBN in its submission to the Committee on January 25, 2012 gave a figure of N1.73trillion comprising direct deductions and Sovereign Debt Notes(SDNs), issued by the Petroleum Products Pricing and Regulatory Agency (PPPRA) to other marketers as at  December 2011.

“According to the Nigerian National Petroleum Corporation (NNPC) such subsidy approvals are credits due to the Corporation towards the cost of its domestic crude allocation.

“There was no time CBN paid any money to NNPC in respect of subsidy claim. It is pertinent to note that NNPC started advising CBN of subsidy deductions from October 2009 after the states had complained at various Federation Account Allocation Committee (FAAC) meetings of lack of transparency in the management of the subsidy regime.

“Our figure presented to the Committee was therefore from October 2009 to December 2011.

“Direct deductions by NNPC as per CBN records between October 2009 and December 2011, shows a total figure of N844, 944,448,471.72 before transfers to Federation Accounts were made.

“CBN does not make any payment to the NNPC on fuel subsidy. The Corporation deducts at source before remitting to the Federation Account.”