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Osinbajo, Adeosun vs. NNPC: Who tells the truth on fuel subsidy payment?
With Maikanti Baru, the NNPC Group Managing Director, announcing in March that Nigeria spends N774 million daily on fuel subsidy payment, it is expected of Nigerians to wonder for what reason this money is being paid, by who, and to whom. However, not all three questions lend themselves to undisputed answers ― most especially the second.
On the question of to whom fuel subsidy is paid, Kemi Adeosun, the minister of finance, gave an answer in February. She said subsidy (technically called under-recovery), under the present administration, is no longer paid to oil marketers, but is borne by the Nigerian National Petroleum Corporation (NNPC), which is fully in charge of importing Premium Motor Spirit (PMS). In other words, subsidy is paid by and to the NNPC.
“There is no subsidy payment in the way the old subsidy scheme use to work where they were paying the oil marketers but there is an under-recovery,” she said. “A loss on the importation of PMS is being borne by NNPC and, therefore, indirectly being borne by every one of us.”
The NNPC Monthly Financial and Operations Report for October 2017, which was released in January, also revealed that, in January 2017, the corporation made a provision of N37.26 billion for ‘under-recovery’.
The week before this release, in December 2017, Vice President Yemi Osinbajo also claimed that it is the NNPC, not the federal government, which bears the cost of fuel subsidy.
While responding to questions from journalists in Apapa, Lagos, he said: “NNPC is trading in fuel; the federal government is not, at the moment, paying for any subsidy. If you are buying and selling fuel, you would have to be able to pay for it. So, it’s not a question of government provision for subsidy, the federal government, at the moment, isn’t paying any subsidy.”
On Tuesday, however, the NNPC disclosed that the federal government, not the corporation, is responsible for paying subsidy on petrol. This disclosure was made by Anibor Kragha, NNPC Chief Operating Officer in charge of Refineries, while addressing the House of Representatives’ Ad-hoc Committee investigating the status of the nation’s four refineries.
The subject of fuel subsidy therefore seems as hazy and controversial as ever ― the latest disclosure making matters even worse.