No subsidy on fuel, FG insists

The Federal Government has insisted that it does not pay subsidy on Premium Motor Spirit.

Finance Minister Kemi Adeosun, while addressing State House reporters yesterday said all Nigerians were bearing the loss on importation by the Nigerian National Petroleum Corporation (NNPC).

“Now, when there is talk of payment of subsidy, technically today, there is no subsidy but there is under recovery. Why that is, is because NNPC are currently doing all the importing. They are importing at a higher price than they are selling which means they are losing money, which means effectively that loss is being borne by everybody and effectively it reflected in the federation account.

“So, 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, a loss on the importation of PMS being borne by NNPC and therefore indirectly being borne by everyone of us,” she said.

Asked who pays the differentials between N171 landing cost for petroleum and N145 pump price, Adeosun said “On the question of subsidy, the price of oil for Nigeria today is a double edge sword. So, every dollar that goes up we get more revenue but also because we are importing refined petroleum increases the landing cost of fuel.

“So for every time we get excited that the oil price is going up, there is also a knock on effect on the price of imported PMS and that is a function of us not having refining capacity, it is one of the unfortunate impact of that.”