Contrary to reports that the Nigerian government led by President Bola Tinubu has reintroduced subsidy on the premium motor spirit (PMS) popularly known as fuel, the Group Chief Executive Officer of the Nigerian National Petroleum Company (NNPC) Limited, Mele Kyari, has said there is no such thing.
While briefing House correspondents on Monday, Kyari insisted that the Federal Government is not paying any fuel subsidy whatsoever. He also said there is no fuel scarcity as rumored but noticeable queue at filling stations was caused by little imbalance in the south to north distribution of the product and that things would level up.
Kyari’s briefing of State House correspondents followed claims by oil marketers that the government had restored subsidy on petrol, contrary to the earlier announcement by President Bola Tinubu that subsidy is gone.
It was reported that the landing cost of fuel was N900 per litre and that the Federal Government reintroduced subsidy on the product in order to stop further increase of price of fuel.
However, after a meeting with President Tinubu at the Presidential Villa Abuja on Monday, Kyari fielded questions from journalists on the matter where he said there is no fuel subsidy at all, insisting that the NNPC is able to recover full cost of fuel importation from current pump price.
“I told you there’s no subsidy whatsoever, we are recovering our full cost from the products that we import. We sell to the market, we understand why the marketers are unable to import. We hope that they do this very quickly and these are some of the interventions the government is doing. There is no subsidy,” Kyari said.
He explained that pockets of queues at filling stations especially in the northern part of the country was due to logistics challenges.
He said, “They have to reroute the trucks around many, many locations for them to be able to reach and that created delays and some supply gaps. But that has been filled and we do not see any of such problems again.
“And secondly, because of the full deregulation that we have in this sector, marketers are now competing amongst themselves.
“So you must have noticed some fuel stations will reduce price by two Naira and three Naira so customers will naturally run to the places where you have that reduction in prices and that creates panic, because for those who don’t know why they are doing it, they will think that there’s something wrong happening, or there’s an ominous sign of scarcity or people start queuing up in the fuel stations.
“Otherwise, there is no challenge. Supply is robust. We have over 1.4 billion litres of product in our hands both marine and land.”
On September 21, 2023, several Nigerian dailies reported that the Federal Government had returned fuel subsidy through the back door, citing a document from the Federal Account Allocation Committee (FAAC).
The reports said the showed that in August 2023, the Nigerian Liquefied Natural Gas (NLNG) paid $275m as dividends to Nigeria via NNPC Limited. NNPC Limited used $220m (N169.4 billion at N770/$) out of the $275m to pay for the PMS subsidy. Then NNPC held back $55m, illegally.
The revelation by FAAC effectively indicates that the subsidy is back and NNPC is now taking NLNG dividends to pay the subsidy.
According to oil and gas industry reports conducted by the Nigeria Extractive Industries Transparency Initiative (NEITI), the cost of petrol subsidy from 2015 to 2020 was N1.99 trillion.
Reports by the Nigerian National Petroleum Corporation (NNPC) to the Federation Accounts Allocation Committee (FAAC), showed that petrol subsidy cost N1.57 trillion in 2021 alone and another N1.27 trillion from January to May 2022, according to a Daily Trust report.
